* Indonesian rupiah at its lowest in a week
* Philippine peso firms 0.4%
* Philippine Feb trade deficit smallest in three months
By Sameer Manekar
April 8 (Reuters) - Indonesia's rupiah led declines for most
of Asia's emerging currencies on Thursday after a contentious
proposal to expand the central bank's mandate, that in the past
sparked worries on its independence, received fresh support from
the President.
Stock markets in the region broadly edged higher, though
Philippine equities, which have risen for three straight
sessions, fell 1.3%, their most in more than a week.
The South Korean won weakened up to 0.4%,
slipping from a six-week high scaled in the previous session,
while Thai baht softened 0.3% to hit its lowest since
October.
Indonesia's rupiah, which backs some of the
highest-yielding debt in emerging markets, lost half a percent
on a report that President Joko Widodo was pushing to expand
Bank of Indonesia's mandate to include economic growth and job
creation.
Last year, his administration and some lawmakers fielded a
draft bill to expand the central bank's mandate, drawing concern
among foreign investors - who hold a major chunk of the
country's debt - over greater government oversight of the
central bank.
"These reports have caused concerns whether it will erode
the independence of the central bank in the way it manages
monetary policy, leading to the underperformance of the
currency," Khoon Goh, head of Asia research for ANZ said.
Indian stocks extended their gains, rising 0.9% to
hit their highest since mid-March, after the central bank on
Wednesday left rates unchanged at record lows and committed to a
large bond purchase programme.
That sent the rupee sharply lower on Wednesday, but
it recovered some ground on Thursday to firm up to 0.4%.
While stocks fell in Manila, the peso firmed 0.4% as
after Philippines reported its smallest trade deficit in three
months in February, on the back of falling imports and a decline
in the slowdown of exports.
Overnight, minutes from the U.S. Federal Reserve's March
meeting showed that officials remained cautious about the risks
from the global coronavirus pandemic, even as the U.S. economy
is showing signs of a strong recovery that is slated to
outperform the rest of the world. Officials committed to
continue monetary policy support until a rebound was more
secure.
The dollar held to a two-week low, while yields on the
10-year Treasuries were trading around 1.6669%.
The rise in U.S. yields over the past month and a half had
built concerns in emerging markets of foreign outflows given the
strength of the U.S. recovery and whether the Fed would need to
roll out support earlier than it has indicated.
HIGHLIGHTS:
** Indonesian 10-year benchmark yields fell 3.5 basis points
to 6.505%
** Financials and technology firms pushed the Nifty 50
higher
Asia stock indexes and currencies at 0411 GMT
COUNTRY FX RIC FX FX INDEX STOCKS STOCKS
DAILY % YTD % DAILY % YTD %
Japan +0.10 -5.91 -0.41 7.89
China -0.06 -0.29 0.19 0.38
India +0.00 -1.99 0.71 6.74
Indonesia -0.48 -3.57 0.17 1.14
Malaysia -0.21 -2.86 0.26 -1.38
Philippines +0.41 -1.15 -0.55 -7.35
S.Korea -0.07 -2.77 -0.01 9.17
Singapore +0.06 -1.45 0.01 12.39
Taiwan +0.03 +0.23 0.48 14.69
Thailand -0.38 -4.74 -0.09 7.30
(Reporting by Sameer Manekar in Bengaluru; Editing by Kenneth
Maxwell)
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