EMERGING MARKETS-Asian currencies mostly steady, US debt ceiling talks dull dollar's shine

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* S. Korean won gains 0.8%, Indonesian rupiah rises 0.2% * China leaves lending benchmarks unchanged in May * Impact of US debt default on Indonesian financial system minimal By Jaskiran Singh May 22 (Reuters) - Asian currencies were mostly steady while the South Korean won edged up on Monday, as the U.S. dollar slipped on stalled debt ceiling talks and the Fed chief's unexpected dovish comments over future interest rate hikes. The South Korean won appreciated 0.8%, up for a fourth straight session, while the Indonesian rupiah rose 0.2% after falling about 0.4% in the previous session. U.S. President Joe Biden and House Republican Speaker Kevin McCarthy are expected to meet later in the day to discuss the debt ceiling - the limit on the amount of money the U.S. government can borrow to fund its services. Negotiations between the two sides broke off suddenly on Friday with Republican negotiators walking out of the meeting. Although talks eventually resumed, neither side cited any progress, knocking the dollar lower. A failure to lift the debt ceiling would trigger a default, likely sparking chaos in markets and a spike in interest rates. U.S. Federal Reserve chief Jerome Powell said last week at a Fed research conference that it was unclear if U.S. interest rates will need to rise further, given uncertainty over the impact of past hikes and the recent bank credit tightening. "Ultimately, this (U.S. debt ceiling talks) is bringing uncertainty for traders, and we've seen previously that lawmakers can take this to the wire, which will bring plenty of volatility," said Josh Gilbert, a market analyst with e-Toro. The chief of Indonesia's financial regulator told a seminar that the impact of any U.S. debt default on Indonesia's financial system would be minimal as most of U.S. bonds in the country were held by local arms of multinational firms. The Chinese yuan gave up early gains and was trading 0.1% lower, with the People's Bank of China pledging to do its utmost to prevent large fluctuations in the local unit. China kept its benchmark lending rates unchanged for the ninth month in May, matching market expectations. "The low inflation backdrop and weaker-than-expected momentum in China's economic recovery has reinforced expectations that the central bank will continue to maintain an accommodative monetary policy," analysts at UOB said in a note. Elsewhere in Asia, the Malaysian ringgit and Singapore dollar remained unchanged, while the Philippines peso depreciated 0.2%. Asian equities saw movements in opposite directions with stocks in Indonesia rising 0.3%, while shares in Thailand fell 0.8%. HIGHLIGHTS: ** China fails Micron's products in security review, bars some purchases ** Vietnam economy to face continued unfavourable external conditions - deputy PM ** Thailand's Move Forward says coalition partners need not support amending royal insult law Asia stock indexes and currencies at 0356 GMT COUNTRY FX RIC FX DAILY % FX YTD % INDEX STOCKS DAILY % STOCKS YTD % Japan +0.19 -4.78 0.13 18.24 China -0.12 -1.75 0.11 6.40 India -0.12 -0.05 -0.01 0.53 Indonesia +0.20 +4.53 0.28 -1.92 Malaysia +0.02 -2.98 -0.63 -5.07 Philippines -0.18 -0.13 -0.80 0.69 S.Korea +0.76 -3.96 0.86 14.46 Singapore +0.03 -0.32 0.09 -1.41 Taiwan +0.11 +0.20 -0.09 14.31 Thailand -0.28 +0.32 -0.80 -9.94 (Reporting by Jaskiran Singh in Bengaluru; Editing by Himani Sarkar)