June 9th, 2008

India stock market down over 3% but RBI capping at 43.00;
BoK suspected of selling USD around 1033.0
BI sold USDIDR to meet market demand and force lower;
HK Holiday

Thailand
Spot flew to 33.45 before A6 sold 100mio USD, offshore curve remains well bid

Singapore
FM said no sign economy headed to a recession but inflation might be long term
Malaysian fuel hike will push costs in Singapore as well

Russia
Basket has been at 29.61 since beginning of March, probably expand the range against the basket to 29.30 to 29.95
Calculate basket by USD/RUB*0.55 + EUR/RUB*0.45
Raised rates a qtr pt for 3rd time this year; refinancing rate to 10.75%; one-day repo at 6.75%

South Africa
Reserves data indicates SARB bought at 7.50
100bp widely expected but risk of a 50bp move to 12.5%
Mboweni mention of 200bp makes 100bp more likely; big change in Q2 is inflation expectations
While mandate is price stability exclusively, need to make medium term FDI attractive (especially with world cup infrastructure development agenda)
Expect a followup August hike to 13% of 50bp
Recent SARB forecasts dont take into account electricity tariff hike (18Jun decision)
Expect political arena to dissent strongly from any action with Zuma in power, Coastu and SACP weigh more
7.9310, downside 7.8370, 7.7790