2025-04-09 04:10

MUMBAI, April 9 (Reuters) - The Indian rupee, alongside its regional peers, was pegged back by a weaker Chinese yuan on Wednesday after U.S. President Donald Trump's "reciprocal" tariffs kicked in , opens new tab, including a massive 104% levy on Chinese goods. The rupee declined 0.4% to 86.65 against the U.S. dollar as of 09:40 a.m. IST. Sign up here. The offshore Chinese yuan hit an all-time low against the dollar on Tuesday, while its onshore counterpart was hovering near its lowest level since September 2023. Other Asian currencies were mostly lower between 0.1% to 0.8%. Meanwhile, traders were awaiting the Indian central bank's monetary policy decision due at 10:00 a.m. IST. The Reserve Bank of India is widely expected to cut rates by 25 basis points, and investors will peruse its commentary for guidance on future policy rates and its foreign exchange policy. Amid the ongoing pressure on the yuan, sources told Reuters that the RBI would tolerate depreciation of the rupee if China weakens its currency to cushion the impact of tariffs. "It remains to be seen if the PBOC will abandon its calibrated approach to keep USD/CNY basically stable and discourage one-way depreciation bets," DBS Bank said in a note. Escalating trade tensions between the U.S. and China alongside the backlash to U.S. trade policies have increased two-way risks and divergences in the currency market, the bank said. Indian corporates have stepped up hedging of foreign exchange liabilities while foreign investors have also pulled money from India's equity markets, intensifying pressure on the rupee, a trader at a foreign bank said. Overseas investors have net sold over $2.5 billion of Indian stocks so far in April, taking the yearly outflows to about $16 billion. Meanwhile, dollar-rupee forward premiums declined, with the 1-year implied yield lower at 2.31% as U.S. bond yields continued to rise. https://www.reuters.com/markets/currencies/rupee-declines-weaker-chinese-yuan-hurts-asia-fx-rbi-decision-awaited-2025-04-09/

2025-04-09 03:44

KUALA LUMPUR, April 9 (Reuters) - The 24% tariff rate imposed by the United States on Malaysian exports could affect growth although policies already in place will help to mitigate the impact, Malaysia's central bank governor told Bloomberg Television on Wednesday. Malaysian exports could be impacted by the tariffs, but the economy is diversified with the service sector accounting for 60% of GDP, Bank Negara governor Abdul Rasheed Ghaffour said in an interview. Sign up here. Malaysia's economy grew 5.1% in 2024 driven by strong domestic demand, record approved investments, and robust exports. The government has forecast growth of 4.5% to 5.5% this year, but is reviewing that in light of the U.S. tariffs. Abdul Rasheed said the central bank was not in a rush to change its own forecast as the situation was fluid. He said it was important for the government to commit to structural reforms to strengthen the economy and provide support for the ringgit. The Malaysian ringgit fell to its lowest level against the dollar in two months on Wednesday, with emerging market currencies under pressure since the tariffs announcement. Abdul Rasheed said the central bank expected continued ringgit volatility, and was ready to curb any excessive fluctuations. "Any currency intervention is done judiciously to ensure an orderly market," he said. Bank Negara Malaysia has held its key interest rate (MYINTR=ECI) , opens new tab unchanged at 3.00% since May 2023. https://www.reuters.com/markets/asia/malaysia-cbank-says-us-tariffs-will-have-impact-economy-is-diversified-2025-04-09/

2025-04-09 03:17

FX matters to be discussed by Japan, US finance chiefs US may pressure Japan to prop up yen, some analysts say Kato's remarks follow Bessent's post signaling talks on FX Recession fears complicate BOJ's rate-hike path TOKYO, April 9 (Reuters) - Japanese Finance Minister Katsunobu Kato said on Wednesday trade negotiations with the United States could include discussions on foreign exchange rates. "There has been various communication, including on exchange rates, from the U.S. side, so currency moves could be among themes up for discussion. But specifics have yet to be set," Kato told parliament. Sign up here. Kato also said any discussions on exchange rates would be held between the finance chiefs of the two countries. While not confirmed, Kato is expected to visit Washington later this month when G20 finance leaders gather on the sidelines of the International Monetary Fund spring meetings. The visit opens up the chance for Kato to hold his first face-to-face meeting with U.S. Treasury Secretary Scott Bessent. Given President Donald Trump's focus on addressing the huge U.S. trade deficit, some analysts say Japan may face pressure from Washington to help reverse the yen's downtrend, which gives its exports a competitive advantage. "The chance of an introduction of steps to guide the yen higher is not small," as Trump may favour steering the dollar lower to revitalise U.S. manufacturers, analysts at Mizuho Securities wrote in a research note. "The dollar-weakening, yen-strengthening measures will focus on yen-buying currency intervention by Japanese authorities and continued interest rate hikes by the Bank of Japan," they said. The yen has actually firmed more than 7% against the softening dollar so far this year, after sliding around 10% in 2024. Japanese Prime Minister Shigeru Ishiba and U.S. President Donald Trump agreed to initiate bilateral discussions on tariffs in a telephone meeting on Monday. While Economy Minister Ryosei Akazawa has been appointed as trade negotiator for Japan, Kato is also likely to play a key role in the talks with the United States as his ministry oversees the country's exchange-rate policy. Trump has designated Bessent and U.S. Trade Representative Jamieson Greer to oversee trade negotiations with Japan. "Japan remains among America's closest allies, and I look forward to our upcoming productive engagement regarding tariffs, non-tariff trade barriers, currency issues, and government subsidies," Bessent said in a post on X on Tuesday. The United States is Japan's biggest export destination, with roughly 28% of the total comprised of automobile shipments. Trump's decision to slap a 25% levy on automobile imports, and a reciprocal 24% tariff on other Japanese goods, is expected to deal a huge blow to Japan's economy, with analysts predicting the higher duties could knock up to 0.8 percentage points off economic growth. The market rout and global recession fears caused by Trump's tariffs have complicated the BOJ's efforts to wean the economy off massive stimulus, including by raising interest rates from still-low levels. "Domestic and overseas economic uncertainties have heightened due to U.S. automobile and reciprocal tariffs," BOJ Governor Kazuo Ueda told parliament, adding the central bank will carefully analyse how the U.S. tariffs could affect the economy in setting monetary policy. https://www.reuters.com/world/japan-us-may-debate-fx-trade-talks-finance-minister-kato-says-2025-04-09/

2025-04-09 01:36

TOKYO, April 9 (Reuters) - Japanese Finance Minister Katsunobu Kato on Wednesday ruled out using the country's U.S. Treasury holdings as a bargaining tool against President Donald Trump's decision to slap tariffs against imports from Japan. "We manage our U.S. Treasury holdings from the standpoint of preparing for in case we need to conduct exchange-rate intervention in the future," not from the standpoint of bilateral diplomacy, Kato told parliament. Sign up here. Kato was responding to a ruling party lawmaker's call for Japan to consider selling its U.S. Treasury holdings, which is part of the country's huge foreign reserves, as a countermeasure against U.S. tariffs. The government does not see Japan's foreign reserves as excessively large, adding it had no pre-set standard on what the appropriate size would be, Kato said. Unloading Japan's foreign reserves would also mean selling foreign assets in exchange for yen, which would be tantamount to yen-buying currency intervention, he said. "We should be cautious about taking such steps regardless of the size of such operations," Kato added. Japan holds roughly $1.27 trillion in foreign reserves. While the government does not disclose the composition, analysts estimate that most of it is composed of U.S. Treasury debt. https://www.reuters.com/markets/asia/japan-rules-out-using-us-treasury-holdings-counter-trump-tariffs-2025-04-09/

2025-04-09 01:00

BUENOS AIRES, April 8 (Reuters) - The International Monetary Fund said on Tuesday it reached a staff-level agreement with Argentina on a 48-month extended fund facility totaling $20 billion. The IMF said the agreement, which is subject to approval by its executive board, "builds on the authorities' impressive early progress in stabilizing the economy, underpinned by a strong fiscal anchor, that is delivering rapid disinflation and a recovery in activity and social indicators." Sign up here. Argentina desperately needs the $20 billion deal to unlock investment-blocking capital controls, bolster its depleted foreign currency reserves and come out of a tight inflationary pinch. "When the board discusses the program, the amount of the first disbursement will be known," an IMF source said. IMF's executive board will consider the proposed arrangement in the coming days, according to the statement. Libertarian president Javier Milei congratulated his Economy Minister Luis Caputo on X after the deal was announced. https://www.reuters.com/world/americas/imf-reaches-20-billion-staff-level-agreement-with-argentina-2025-04-09/

2025-04-09 00:39

April 8 (Reuters) - President Donald Trump on Tuesday said the U.S. will soon announce a "major" tariff on pharmaceutical imports. Speaking to an event at the National Republican Congressional Committee, Trump said the tariff will incentivize drug companies to move their operations to the U.S. Sign up here. https://www.reuters.com/world/us/trump-says-us-will-soon-announce-tariffs-pharmaceutical-imports-2025-04-09/