EMERGING MARKETS-Singapore shares hit record peak; rupiah pares losses as BI holds rates

Updates as at 0807 GMT

By Rajasik Mukherjee and Roushni Nair

Feb 19 (Reuters) - Indonesian rupiah pared losses on Wednesday after the country's central bank kept its interest rate unchanged in a widely expected move, while Singapore stocks hit a record high after a promising budget for 2025 boosted sentiment.

Bank Indonesia (BI), which had surprised the market with a rate cut last month, held interest rates steady at 5.75% on Wednesday to arrest the rupiah's decline. The currency is down about 1.5% so far this year.

The central bank flagged caution around further easing as it intends to keep a close eye on the rupiah's movement, inflation and economic growth.

"A sharp deceleration in January inflation on policy measures and a likely negative fiscal impulse to growth in the first half due to spending cuts, keeps the door open for further cuts in the first half of the year," said Radhika Rao, senior economist with DBS Bank.

Rao expects the BI to cut interest rates by 50 basis points more this year.

The rupiah pared some losses to fall 0.4% as of 0807 GMT. It had earlier lost as much as 0.6%.

Stocks in Jakarta .JKSE were flat after the BI's decision, having declined 0.7% earlier.

Elsewhere in the region, Singapore's benchmark stock index .STI rose 0.6% to a record peak of 3,949.65 points and has gained 4% this year. UOB, Singapore's third-biggest bank, logged a 9% rise in quarterly profit and announced a $2 billion special dividend and share buyback package.

Meanwhile, Singapore's budget for 2025 - unveiled on Tuesday - included vouchers, tax rebates and cash handouts to help consumers.

JP Morgan analysts lifted their rating for Singapore stocks to "overweight", citing inexpensive valuations, low volatility compared to regional peers, and government efforts to boost the local stock market.

Shares in South Korea .KS11 climbed 2.1% logging their seventh consecutive session of gains, aided by a rally in chip stocks. Gains were powered by a 3.4% jump in Samsung Electronics 005930.KS and a 4.3% rise in SK Hynix 000660.KS.

Stocks in Manila .PSI advanced 0.4% to hit their highest level in more than a week while those in Thailand .SETI and Malaysia .KLSE were flat.

The rest of the Asian currencies were largely range-bound against a firm U.S. dollar as tariff concerns and tense Russia-Ukraine negotiations dampened risk appetite.

The dollar index =USD, which measures the greenback against a basket of rivals, held steady on Wednesday. USD/

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