* Philippine peso appreciates 1% * Equities in the region mixed * China keeps benchmark lending rates unchanged By Himanshi Akhand Feb 20 (Reuters) – Emerging Asian currencies edged higher on Monday, with the Philippine peso and the Thai baht leading gains, while fears that the U.S. Federal Reserve could keep interest rates higher for longer kept risk appetite in check. The baht appreciated as much as 0.8% after weakening 2.4% last week. Data on Friday showed that Thailand’s economy unexpectedly contracted in the final quarter of 2022. The peso strengthened 1% after declining 1.9% last week. The U.S. markets will be closed for a public holiday on Monday. Modest liquidity is likely to keep trading within a fairly narrow range as a result, said Khoon Goh, head of Asia research at ANZ. The dollar was steady, helped by a strong run of U.S. economic data that raised bets for the Fed to stay on its policy tightening path for longer than initially expected. Data pointing to sticky inflation, robust retail sales growth and a still-tight labour market, have led markets to revisit their rate expectations. Fed officials’ hawkish comments signalling that interest rates will need to go higher in order to tame inflation have also supported the dollar. The South Korean won and the Indonesian rupiah added 0.4% and 0.3%, respectively. The Fed is due to issue minutes of its last meeting later this week. “Markets will be looking out for any signs that the Fed is getting more comfortable with the trajectory of inflation,” Goh said, adding that further commentary or insights into Fed officials’ thinking around disinflation will be closely watched. In Malaysia, government data showed that exports rose 1.6% from a year earlier in January, slower than the expected 7.4% expansion. The ringgit was up 0.1% while stocks in Kuala Lumpur fell 0.4%. “We now view our base case for Bank Negara Malaysia (BNM) to hike its policy rate by another 25 bps to 3.00% in March as a close call – the risk of a further delay has risen significantly with this soft export print,” analysts at Barclays wrote. BNM had unexpectedly kept its benchmark interest rate unchanged at 2.75% in January. China kept its benchmark lending rates unchanged for a sixth straight month in February, as expected, with the world’s second-largest economy showing more signs of recovery from a pandemic-induced slump. The yuan inched up 0.1%, while stocks in Shanghai rose 2%. Other regional equities were mixed, with stocks in Bangkok rising 0.3%, while Manila and Singapore retreating 0.6% and 0.4%, respectively. HIGHLIGHTS ** Indonesia posted a $4.7 billion surplus in its balance of payments for the last quarter of 2022, due to a high current account surplus ** Thai banks’ non-performing loans stood at 2.73% of total lending at the end of December 2022, helped by debt restructuring, the central bank said Asia stock indexes and currencies at 0643 GMT COUNTRY FX RIC FX FX INDE STOCKS STOCKS DAILY % YTD % X DAILY YTD % % Japan +0.04 -2.22 <.N2 0.07 5.51 25> China EC> India +0.17 +0.04 <.NS -0.10 -0.98 EI> Indonesi +0.26 +2.67 <.JK -0.17 0.48 a SE> Malaysia +0.11 -0.56 <.KL -0.36 -1.60 SE> Philippi +0.78 +1.09 <.PS -0.60 2.62 nes I> S.Korea 11> Singapor +0.07 +0.34 <.ST -0.37 1.99 e I> Taiwan +0.14 +1.12 <.TW 0.46 10.00 II> Thailand +0.71 +0.71 <.SE 0.26 -0.76 TI> (Reporting by Himanshi Akhand in Bengaluru; Editing by Rashmi Aich)


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