* Philippine central bank hikes policy rate
* Indonesian rupiah hits record low of 17,315 a dollar
* Philippine peso, Thai baht, Indian rupee weaken
* Stocks across Southeast Asia decline
(Updates for afternoon trade)
By Rajasik Mukherjee and Sameer Manekar
April 23 (Reuters) - The Indonesian rupiah hit a record
low of 17,315 per U.S. dollar on Thursday as elevated oil prices
and persistent fiscal and governance worries trigger capital
outflows, while the Philippine peso briefly pared losses after a
rate hike.
The Philippine peso trimmed some losses to trade
around 60.36 a dollar immediately after the Bangko Sentral ng
Pilipinas (BSP) raised its key interest rate to 4.50% to contain
inflation.
However, the currency declined to its intraday low of 60.472
shortly after, loitering around its weakest point since April 6.
A minority of 12 out of 26 economists had predicted the BSP
would deliver a quarter-point hike.
"The hike reflects heightened concern over a worsening
inflation outlook, driven by higher global oil and fertilizer
prices and the continued rise in core inflation," said Ruben
Carlo Asuncion, chief economist at Union Bank of the
Philippines.
Stocks in Manila were largely unfazed by the
decision, trading flat as of 0713 GMT.
Asian countries, especially net energy importers such as
Indonesia, India, the Philippines, and Thailand, have been hard
hit by the Iran war, as the closure of the Strait of Hormuz and
uncertainty around the U.S.-Iran ceasefire have kept oil prices
elevated for a prolonged period, raising inflation risks.
In Indonesia, the rupiah fell 0.8% in what could be
its steepest one-day drop since September 9, with the abrupt
ouster of influential finance minister Sri Mulyani Indrawati
triggering a sharp selloff.
The IDR's move "looks like the result of a combination of
pressures hitting at the same time: unresolved war risks,
renewed oil pressure, Indonesia-specific sovereign and fiscal
concerns, and still-fragile foreign positioning," said Josua
Pardede, chief economist at Permata Bank.
"If talks between the U.S. and Iran truly restart and oil
falls in a sustained way, IDR can recover."
Bank Indonesia on Wednesday vowed to go all out to defend
the "undervalued" currency and said it stood ready to adjust its
policy as necessary to provide stronger support for the rupiah
and keep inflation in check.
The rupiah has lost more than 3.5% since the war began in
late February, making it the second-worst-performing Asian
currency this year after the Indian rupee, which is
down 4.5% so far.
Elsewhere, Asian currencies were broadly weaker against the
U.S. dollar. The Thai baht fell to 32.44, its lowest
since April 8, the Indian rupee weakened past 94 for the first
time in April, and Malaysia's ringgit slipped to an
eight-session low.
An MSCI gauge of global EM currencies inched
lower to a seven-session low.
STOCKS WHIPSAW
Equities across emerging Asia deepened their losses in
afternoon trading. The MSCI EM Asia gauge scaled
a record high before pulling back as stalled U.S.-Iran peace
talks sapped risk sentiment.
Stocks in Singapore fell 1% to their lowest since
April 7, while those in Indonesia lost 1.5% in what
could be their weakest session since April 2.
Thai stocks fell 1.5% to their lowest level since
April 7.
Volatility was most pronounced in South Korea and Taiwan.
The KOSPI breached 6,500 points for the first time
before falling 1.7% at one point in the session. The index
recovered in afternoon trading to finish at a record close.
Taiwan's benchmark stock index also scaled an
all-time high of 37,971 points, but later pared its gains to end
0.4% lower.
Market participants are keeping a close watch on
developments in the Middle East with the lack of progress
towards renewed peace talks pushing oil prices above $100 a
barrel for the first time in two weeks.
HIGHLIGHTS:
** Yield on Indonesia's 10-year bonds jumps 4.9
basis points to 6.687%
** Singapore core inflation at 1.7% y/y in March, matching
expectations
** Bank Indonesia vows to ramp up rupiah defence as it sinks
to record low
Asia stock indexes and currencies at 0713 GMT
Japan -0.13 -1.90
-0.75 17.48
China India -0.30 -4.47 -0.79 -7.44
Indonesia -0.78 -3.67 -1.60 -14.18
Malaysia -0.30 +2.37 0.29 2.10
Philippines -0.60 -2.74 -0.10 -1.14
S.Korea Singapore -0.05 +0.75 -1.07 6.53
Taiwan -0.10 -0.42 -0.43 30.21
Thailand -0.48 -2.96 -1.54 15.66
($1 = 17,305.0000 rupiah)
(Reporting by Rajasik Mukherjee and Sameer Manekar in
Bengaluru; Editing by Subhranshu Sahu and Janane Venkatraman)
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