EM ASIA FX-Most eke out gains as dollar eases, but virus-driven growth fears persist

By Shriya Ramakrishnan

* Indonesian rupiah gains over 1% * Singapore warns of deep recession * Malaysia, India likely to unveil stimulus this week (Adds text, updates prices) By Shriya Ramakrishnan March 26 (Reuters) - A weaker dollar helped most emerging Asian currencies notch tepid gains on Thursday, though sentiment remained fragile as lockdowns and growth downgrades in the face of the coronavirus pandemic worsened the economic outlook for the region. Nationwide lockdowns and severe restrictions on personal movement to slow the spread of the highly contagious coronavirus have cemented the case for a likely global recession. "Bankruptcies and business closures could leave scars on the global economy, even after draconian containment measures are eased. Risk-on sentiment is thus unlikely to be durable in such a scenario," Wei-Liang Chang, FX and credit macro strategist at DBS Bank said. During the session, most Asian currencies benefited as the dollar weakened ahead of the release of U.S. jobs data, that is expected to a surge in unemployment benefit claims. The South Korean won and Taiwan dollar traded 0.2% higher. Further aiding sentiment, Bank of Korea said it will temporarily offer an unlimited amount of money for three months through repo operations, while the government plans to relax foreign exchange liquidity rules for banks to encourage them to supply more dollars into local markets. The Thai baht largely wavered between positive and negative territory during the session. Thailand's central bank warned that the economy will sharply contract this year, but opted to stand pat on policy rates, after cutting it at a special meeting last week by 25 basis points to a record low. The Singapore dollar weakened as much as 0.3% to 1.451 against the greenback, as the city-state warned of a deep recession due to the pandemic. Singapore's economy suffered the sharpest contraction in a decade in the first quarter, while its factories posted their biggest output drop on record. Meanwhile, the Indonesian rupiah, which resumed trade after a holiday, gained 1.2% and was the top performer in the region. "IDR has previously been sold off heavily amidst large bond outflows. A stabilization in risk sentiment, and abating outflows, could prompt a larger IDR recovery relative to Asian peers," Chang added. The Malaysian ringgit advanced 0.9%, ahead of the announcement on a second economic stimulus package on Friday. The Indian rupee, which also resumed trade after a holiday, strengthened as much as 0.9% to 75.23 per dollar, its best intraday performance in more than six months, as investors awaited a domestic stimulus to combat the virus outbreak. Reuters reported on Wednesday that India was likely to unveil an economic stimulus package of more than 1.5 trillion rupees ($19.6 billion) by the end of the week. CURRENCIES VS U.S. DOLLAR Change on the day at 0555 GMT Currency Latest bid Previous Pct day Move Japan yen 110.570 111.19 +0.56 Sing dlr 1.449 1.4468 -0.14 Taiwan dlr 30.262 30.325 +0.21 Korean won 1227.600 1229.9 +0.19 Baht 32.800 32.81 +0.03 Peso 50.920 51.03 +0.22 Rupiah 16250.000 16450 +1.23 Rupee 75.335 75.88 +0.72 Ringgit 4.350 4.387 +0.85 Yuan 7.112 7.1095 -0.03 Change so far in 2020 Currency Latest bid End 2019 Pct Move Japan yen 110.570 108.61 -1.77 Sing dlr 1.449 1.3444 -7.21 Taiwan dlr 30.262 30.106 -0.52 Korean won 1227.600 1156.40 -5.80 Baht 32.800 29.91 -8.81 Peso 50.920 50.65 -0.53 Rupiah 16250.000 13880 -14.58 Rupee 75.335 71.38 -5.25 Ringgit 4.350 4.0890 -6.00 Yuan 7.112 6.9632 -2.09 (Reporting by Shriya Ramakrishnan in Bengaluru; Editing by Shailesh Kuber)