EMERGING MARKETS-Baht drops ahead of rate decision, rupiah at over 6-week high
* Thailand reports record daily virus cases and toll * Malaysia's prime minister faces calls to quit; stocks fall * Bank of Thailand likely to hold key rates By Soumyajit Saha Aug 4 (Reuters) - Thailand's baht traded at 16-month lows ahead of a policy decision by the country's central bank on Wednesday, while Indonesia's rupiah extended gains, helped by an improving outlook for Southeast Asia's largest economy. The baht, Asia's worst performing currency so far this year, eased 0.2% as the Bank of Thailand was expected to stand pat on interest rates amid the biggest COVID-19 outbreak to date in the trade and tourism-dependent country. Domestic sentiment remains soft compared with Thailand's peers as COVID-19 cases rise, increasingly straining the country's medical system and challenging the tourism industry, Maybank analysts wrote in a note. Several analysts expect the baht to stay weak for the rest of the year. Thailand reported its highest daily increases in new coronavirus cases and deaths on Wednesday, while a survey by a capital market group showed investor confidence in Thai financial markets had dropped to a nine-month low. Meanwhile, the Indonesian rupiah extended gains to hit a six-week high a day before Indonesia was set to report its first economic growth in five quarters, according to a Reuters poll. Sentiment in Indonesia is "supported by encouraging signs of moderation in COVID-19 case counts, as well as the recent decline in U.S. Treasury yields," analysts at Maybank wrote. "The latter has made Indonesia's sovereign bonds relatively more appealing," they said. On the day, yield on the country's 10-year benchmark bonds was down 1.5 basis points at 6.261%. Indonesia's health minister on Monday said the wave of coronavirus infections had passed its peak. The country raised an above-target 34 trillion rupiah ($2.37 billion) from a biweekly bond auction on Tuesday. On stocks, Kuala Lumpur shares dipped more than 1% to near nine-month lows amid political uncertainty and a surge in coronavirus cases. Malaysian Prime Minister Muhyiddin Yassin said he would seek a vote on his legitimacy when parliament meets in September after a key ally withdrew support for the government. Singapore shares advanced more than 1% as encouraging earnings from heavyweight lenders boosted the benchmark index. HIGHLIGHTS ** Singapore's 10-year benchmark yield were up 3.6 basis points at 1.311% ** Shares of Singapore lenders Oversea-Chinese Banking Corp and United Overseas Bank rise 1.4% and 1.7%, respectively Asia stock indexes and currencies at 0421 GMT COUNTRY FX RIC FX FX INDEX STOCKS STOCKS DAILY YTD % DAILY YTD % % % Japan -0.01 -5.33 -0.24 0.48 China +0.15 +1.05 0.56 -0.17 India +0.00 -1.64 0.69 16.17 Indonesia +0.21 -1.89 0.26 2.80 Malaysia -0.19 -4.87 -0.89 -8.62 Philippines +0.05 -3.35 0.45 -7.71 S.Korea +0.24 -5.18 1.19 14.00 Singapore +0.17 -2.08 0.93 11.77 Taiwan +0.34 +2.33 0.21 19.40 Thailand -0.12 -9.38 -0.35 5.92 (Reporting by Soumyajit Saha in Bengaluru; Additional reporting by Anushka Trivedi; Editing by Sonali Paul)
