* Bank Indonesia keeps interest rate unchanged
* Indonesian stocks pare gains slightly
* Rupiah inches higher but hovers around 16,995 a dollar
(Updates post afternoon trade)
By Shivangi Lahiri
March 17 (Reuters) - Indonesian stocks pared some gains
while the rupiah edged higher on Tuesday after the country's
central bank kept its key policy rates unchanged amid
uncertainty over the impact of the Middle East war.
Stocks in Jakarta were last up 1.2% after rising as
much as 1.8% earlier in the day, while the rupiah firmed
to 16,975 per dollar, having touched an all-time low of 16,995 a
day earlier.
Bank Indonesia (BI), in a widely expected decision, held the
benchmark 7-day reverse repurchase rate at 4.75%, and said it
will issue a new policy on foreign currency transactions
applicable from April to support the currency.
Governor Perry Warjiyo said the central bank had intensified
its rupiah intervention as the Iran war had affected the
currency, adding that the BI has "erased the statement on a
potential rate cut due to the Middle East conflict".
"A period of high oil and gas prices would cause the current
account deficit to widen, a risk acknowledged by Governor
Warjiyo, and threaten further downward pressure on the rupiah,"
analysts at Capital Economics wrote.
"The fiscal backdrop compounds this vulnerability."
Elsewhere in Asia, stocks in Seoul trimmed some
gains but still closed at a two-week high, up 1.6%, helped by a
near 3% jump in Samsung Electronics (SSNLF) shares.
Nvidia (NVDA) CEO Jensen Huang said its new AI chips were
being made by Samsung, prompting analysts to predict that the
South Korean firm's loss-making foundry business could return to
profit as early as next year.
Taiwan's tech-heavy stock market, which will also
benefit from rising AI chip demand, ended 1.5% higher.
That helped the MSCI EM Asia index advance
about 1.1%.
Markets are awaiting policy decisions later this week from
the U.S. Federal Reserve, the Bank of Japan and other major G10
central banks. The Reserve Bank of Australia raised rates on
Tuesday for a second straight month to curb inflation.
Thailand stocks rose as much as 2.5% to their
highest since March 2, while stocks in Malaysia advanced
0.8%.
Currencies in emerging Asia were largely muted, with the
Malaysian ringgit gaining as much as 0.3% to hit its
highest level in two weeks.
By contrast, Thailand's baht slipped to 32.39
against the dollar, while the Philippine peso hovered
close to the key psychological level of 60 per dollar.
HIGHLIGHTS:
** Thailand seeks crude oil from Russia, says domestic
diesel prices to rise
** Taiwan says it has received no information from US on
delay of second arms sale
** Bank of Japan chief stresses need to hit 2% inflation
backed by wage gains
** China, US in communication over Trump's visit, foreign
ministry says
Asia stock
indexes and
currencies
at 0821 GMT
Japan -0.07 -1.58
-0.09 3.60
China India Indonesia +0.06 -1.80 1.15 -17.86
Malaysia +0.33 +3.60 0.80 1.79
Philippines -0.26 -1.67 0.32 -0.44
S.Korea Singapore -0.08 +0.56 1.12 5.96
Taiwan Thailand (Reporting by Shivangi Lahiri in Bengaluru; Additional
reporting by Rae Wee in Singapore; Editing by Jacqueline Wong
and Eileen Soreng)
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