Indonesian shares trimmed early losses to trade flat after Bank Indonesia held its rate for a fourth straight review, while cutting the reserve requirement ratio to 7% from 9% and lifting its overnight deposit rate by 25 basis points to 5%. DBS's Radhika Rao said BI would rely on FX intervention and hedging rather than more rate hikes to support the rupiah, which slipped below 18,000 and is down 7.4% this year. BNP Paribas remains positive on short-end Indonesian bonds, but MSCI's warning of a possible downgrade to “standalone” status could trigger passive fund selling. Elsewhere, South Korea's KOSPI rose 3.3% and Taiwan gained 1.3%, while the Philippine peso hit a record low of 63.302 per dollar as markets expect the central bank to raise rates to 5.25% amid 7.2% inflation.
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