This week's ASEAN Week (May 31 – June 6, 2569) provides an update on the latest developments in Southeast Asia over the past week.
For ASEAN Week "Bank Finance" This week, from May 31st to June 6th, 2569, we will bring you the latest news and developments in the ASEAN region, including:
- ASEAN's manufacturing sector recovers after four months, with Vietnam and Thailand leading the way, despite weak exports.
- Cambodia has submitted a request to the UN to mediate a dispute over maritime resources and oil from Thailand, valued at $3 billion.
- The Prime Minister has instructed the Ministries of Commerce and Agriculture to expedite negotiations with Malaysia regarding the suspension of imports of five varieties of Thai shrimp.
- The Prime Minister is preparing for a visit to Vietnam, and has ordered accelerated cooperation between Thailand and Vietnam to boost trade to 2.5 billion dollars.
- Vietnam recorded a record trade deficit of $5.2 billion, with the Iran-Iran conflict further exacerbating the economic crisis.
- Singapore is benefiting from a surge of safe-haven capital due to a record high interest rate differential with the United States.
- The Indonesian market suffered a severe slump, with the rupiah exceeding 18,000 per dollar and stocks falling to their lowest level in six years.
- The Indonesian parliament has approved expanding the role of the central bank, with the aim of supporting the real economy.
- Vietnam is moving forward with the development of an international financial center, aiming to attract billions of dollars in investment in maritime and aviation sectors.
- The central bank and the Indonesian Ministry of Finance have agreed to increase returns on financial assets to support the rupiah.
ASEAN's manufacturing sector recovers after four months, with Vietnam and Thailand leading the way, despite weak exports.
ASEAN's manufacturing sector showed strong recovery in May, with the PMI rising to 51.5, its highest level in four months, driven by increased domestic demand despite weak exports. Vietnam and Thailand led the recovery with PMI figures of 52.8 and 52.6, respectively. However, businesses remain cautious about hiring amid risks from war, inflation, and global trade uncertainty, which continue to pressure future growth prospects.
The Prime Minister is preparing for a visit to Vietnam, and has ordered accelerated cooperation between Thailand and Vietnam to boost trade to 2.5 billion dollars.
Prime Minister Anutin Charnvirakul is preparing to visit Vietnam at the invitation of To Lam and attend the ASEAN Future Forum 2026 from June 8-9, 2569. He has also instructed all ministries to accelerate the development of concrete cooperation between Thailand and Vietnam in trade, investment, logistics, clean energy, and food security, following the upgrading of bilateral relations to a comprehensive strategic partnership. The goal is to increase bilateral trade to US$25,000 billion from the current approximately US$24,000 billion.
Vietnam recorded a record trade deficit of $5.2 billion, with the Iran-Iran conflict further exacerbating the economic crisis.
Vietnam is facing increasing economic pressure after its May trade deficit hit a record high of US$5.21 billion, driven by higher energy and imported raw material costs amid conflicts in the Middle East. Inflation also accelerated to 5.6%, exceeding the central bank's target, making the government's 10% economic growth goal more challenging, despite continued strong export growth.
Vietnam is moving forward with the development of an international financial center, aiming to attract billions of dollars in investment in maritime and aviation sectors.
Vietnam is pushing forward with plans to establish International Financial Centers (VIFCs) in Ho Chi Minh City and Da Nang to attract billions of dollars in investment in maritime and aviation finance. The country is also preparing to relax foreign exchange and capital movement regulations, aiming to elevate its status as a regional financial hub and bring more added value from trade, logistics, and financial services back into the country. However, experts believe success depends on long-term legal and institutional reforms.
Cambodia has submitted a request to the UN to mediate a dispute over maritime resources and oil from Thailand, valued at $3 billion.
Cambodia has filed a request with the United Nations (UN) to initiate mandatory mediation proceedings with Thailand under UNCLOS, hoping to resolve the dispute over overlapping territorial claims in the Gulf of Thailand, which is estimated to contain oil and natural gas resources worth over US$300,000 billion. This follows a lack of progress in negotiations between the two countries. Thailand has 21 days to appoint a mediator. Meanwhile, the Thai government affirms its commitment to defending national sovereignty, following the cancellation of a 2544 memorandum of understanding (MOU) that provided a framework for cooperation on resource development in the area.
The Prime Minister has instructed the Ministries of Commerce and Agriculture to expedite negotiations with Malaysia regarding the suspension of imports of five varieties of Thai shrimp.
Prime Minister Anutin Charnvirakul has instructed the Ministry of Commerce and the Ministry of Agriculture to urgently negotiate with Malaysia after the latter announced a temporary suspension of imports of five species of Thai shrimp starting June 1, 2026. This is to mitigate the impact on farmers, exporters, and fishermen. Measures are also being prepared to support farm-gate shrimp prices, manage domestic surplus production, and find new export markets to prevent the entire burden from falling on Thai farmers.
Singapore is benefiting from a surge of safe-haven capital due to a record high interest rate differential with the United States.
Singapore benefited from capital inflows into safe-haven assets amid tensions in the Middle East, resulting in the 2-year swap spread between Singapore and the US expanding to a record high of 2.46%. Singapore's economy remains strong and liquid, keeping domestic borrowing costs low, unlike the US which faces inflationary pressures and rising interest rates due to soaring energy prices.
The Indonesian market suffered a severe slump, with the rupiah exceeding 18,000 per dollar and stocks falling to their lowest level in six years.
Indonesia's financial markets faced significant pressure, with the rupiah weakening below 18,000 rupiah per US dollar for the first time. The JCI stock index also plummeted to its lowest level in nearly six years amid concerns over the economic outlook, fiscal stability, rising oil prices, and policy uncertainty. This led to continued selling of assets by foreign investors, and the market is watching closely to see if Bank Indonesia may need to intervene or raise interest rates further to support the currency and restore investor confidence.
The Indonesian parliament has approved expanding the role of the central bank, with the aim of supporting the real economy.
The Indonesian parliament has passed a new financial sector law that expands the role of Bank Indonesia to support real economic growth while maintaining currency and financial system stability. The law aims to promote investment, expand economic activity, and create jobs, reflecting the government's desire for the central bank to play a more proactive role in driving the domestic economy.
The central bank and the Indonesian Ministry of Finance have agreed to increase returns on financial assets to support the rupiah.
Indonesia is coordinating its monetary and fiscal policies to attract foreign capital back into the country after the rupiah weakened to a record low and the stock market plummeted by more than 30%. The central bank and the Ministry of Finance are preparing to increase the attractiveness of financial assets and implement measures to manage financial markets, including currency intervention, bond purchases, and interest rate hikes, in order to restore investor confidence and maintain economic stability.
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