EMERGING MARKETS-Indonesian rupiah hits record low on c.bank independence, fiscal concerns

By Nichiket Sunil

Jan 20 (Reuters) - The Indonesian rupiah slid to an all-time low against the dollar on Tuesday as investor concerns mounted over a widening fiscal deficit and the central bank's independence following President Prabowo Subianto's nomination of his nephew to the board.

Stocks in emerging Asian countries were mixed as trade war concerns revived, sapping risk sentiment. The MSCI gauge of emerging market Asia equities .MIMS00000PUS slid from record highs, while a gauge of global EM stocks .MISU00000PUS inched higher.

Indonesian shares .JKSE gained modestly to scale a record high for the fourth straight session, while those in the Philippines .PSI and Malaysia .KLSE slipped up to 1% each.

South Korea's KOSPI benchmark index .KS11 traded sideways around its record high, while Taiwan's benchmark equity gauge .TWII gained modestly to trade just a few pips below its lifetime high.

In Indonesia, the rupiah IDR= slid to 16,985 per dollar, its weakest point on record, a day after the country's top leader nominated his nephew, currently a deputy finance minister, to join the central bank's board of governors.

Yields on Indonesia's benchmark 10-year bonds ID10YT=RR jumped to 6.331%, the highest since early October.

Investors have been monitoring the fiscal situation of Southeast Asia's largest economy since the abrupt sacking of the well-respected finance minister, Sri Mulyani Indrawati, in September.

President Prabowo's populist spending measures to boost growth, the nomination of his nephew, and a new burden-sharing agreement between the government and the central bank have aggravated concerns about Bank Indonesia's autonomy.

"The markets have perceived this (nomination) rightly or wrongly to be a potential impact on Bank Indonesia's independence," said Michael Wan, a senior currency analyst at MUFG.

"When combined with rising pressure on Indonesia's fiscal deficit to rise above the current 3% cap, (it) has led to further FX pressure. We continue to see the rupiah underperforming on these continued dynamics."

The weakening rupiah may prompt Bank Indonesia to leave its key rate unchanged at 4.75% again on Wednesday, according to a Reuters poll, as it continues to intervene in the foreign exchange markets to limit the currency's weakness.

Elsewhere, the Malaysian ringgit MYR= traded flat around 4.05 a dollar, ahead of the Bank Negara Malaysia's monetary policy meeting on Thursday, where it is expected to keep its overnight policy rate unchanged at 2.75%.

South Korea's won KRW=KFTC resumed its downtrend, slipping marginally to 1,477.8 a dollar, its lowest in about a week.

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