EMERGING MARKETS-Indonesian rupiah bounces from record low after c.bank holds rates as expected

By Nichiket Sunil

Jan 21 (Reuters) - The Indonesian rupiah rebounded from near record lows on Wednesday after the central bank held its key rate unchanged as expected while remaining consistent with its goal to anchor the currency. The rupiah IDR= slightly rose to 16,930 per dollar after the decision, although not far from its all-time low of 16,985 touched in the previous session.

Currencies elsewhere in the region held ground, with the Thai baht THB=TH trading near 2021-highs on record gold, while the South Korean won KRW=KFTC gained after President Lee Jae Myung's remarks.

The Indian rupee INR=IN, however, fell past the 91.50 mark for the first time, as the global equity selloff magnified outflows that pressured the currency.

Bank Indonesia left its benchmark rate IDCBRR=ECI unchanged at 4.75% as anticipated, with Governor Perry Warjiyo saying their "current focus" was still on keeping the rupiah stable.

Lavanya Venkateswaran, a senior ASEAN Economist with OCBC said that BI has left room for further rate cuts but the timing will depend on rupiah's moves.

The rupiah, which has already weakened 1.5% in January, has been hit with concerns around its autonomy after President Prabowo Subianto nominated his nephew to join its board of governors, while fiscal deficit worries added to the pressure. "Monetary easing will be opportunistic this year, and likely deferred to the second half, subject to market conditions," said Radhika Rao, senior economist with DBS Bank.

The South Korean won KRW=KFTC rose as much as 0.6% to 1,467.7 per dollar, rebounding from a near four-week low of 1,480.0 touched on Tuesday, after Lee said authorities expected the currency to strengthen towards 1,400 in a month or two.

The won's recent weakness has attracted verbal support from the central bank, the government, and even U.S. Treasury Secretary Scott Bessent, who said the currency's slide was not in line with fundamentals.

The equity benchmark KOSPI .KS11 rebounded to end the day 0.5% higher near all-time highs. President Lee also said that the domestic stock market, which surged 76% last year and is continuing its unprecedented rally with a 16.5% advance so far in January, was still undervalued.

In Southeast Asia, the Thai baht THB=TH traded near its strongest level since late March 2021, on surging gold prices, which crossed $4,800 an ounce on Wednesday for the first time.

The Malaysian ringgit MYR= edged up on the day, ahead of Bank Negara Malaysia's meeting on Thursday, when the central bank is expected to keep its benchmark interest rate unchanged, according to a Reuters poll.

Stocks elsewhere in the region pulled back from record highs on heightened trade tensions over U.S. threats to acquire Greenland, which pulled Wall Street down 2% overnight. MKTS/GLOB

Taiwan's benchmark stock index .TWII ended down 1.6% from a record closing high the previous day.

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