EMERGING MARKETS-Malaysia stocks edge higher after c.bank rate hold, upbeat growth outlook

By Nichiket Sunil

Jan 22 (Reuters) - Malaysian equities inched higher, while the ringgit was steady on Thursday after the country's central bank kept its interest rate unchanged, expecting robust growth this year.

Elsewhere, currencies appreciated on the day, with the Indonesian rupiah IDR= extending gains after the Indonesian central bank held rates and stressed rupiah stabilisation efforts on Wednesday, pulling the currency from record low levels.

The ringgit MYR= was at 4.0420 per U.S. dollar, while Kuala Lumpur stocks .KLSE advanced 0.6% to within a few points of a seven-year peak. The currency, among Asia's strongest, appreciated nearly 0.5% so far this month after a 9% gain in 2025.

Strong economic growth and record-high trade performance last year highlighted Malaysia's strong economic fundamentals, while reducing pressure on the central bank to ease rates any further.

Bank Negara Malaysia (BNM) left its overnight policy rate unchanged at 2.75%, as expected, and forecast economic growth in 2025 at the upper end of its outlook range.

"The rate hold was widely anticipated. There were no major shifts in rhetoric in the policy statement either, which retained the 'appropriate and supportive' stance, benign inflation view and acknowledgment of both upside and downside risks to growth," ANZ economist Krystal Tan said.

Jeff Ng, head of Asia macro strategy at SMBC, said, "Looks like BNM can afford to wait and see without committing to a dovish or hawkish tone."

Stocks in the region raced towards record highs on Thursday after U.S. President Donald Trump softened his stance on EU tariff threats and ruled out seizing Greenland from an ally by force, reviving appetite for riskier assets.

The MSCI gauge of Asian emerging stocks .MIMS00000PUS surged 0.7%, with equities in South Korea .KS11 securing a record closing high, Taiwan .TWII ended a few points shy of its all-time high.

East Asian benchmarks rose as the pause in geopolitical tensions allowed markets to return to artificial intelligence-linked asset optimism.

"The rebound is strongest in pockets, which were earlier in good momentum, notably in semiconductor markets such as South Korea and Taiwan," Rajat Agarwal, Asia equity strategist at Societe Generale, said.

"In addition to the developments on the greenback, the renewed confidence on global AI spending and demand from industry leaders is certainly helping these markets."

Stocks across Southeast Asia advanced: Singapore .STI and Indonesia .JKSE resumed their move towards lifetime highs scaled earlier this month.

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