(Corrects first bullet in highlights to say stocks are down)
* Graphic: World FX rates http://tmsnrt.rs/2egbfVh
* Graphic: Foreign flows into Asian stocks https://tmsnrt.rs/3f2vwbA
* Bank Indonesia keeps key rate at 4%
* Philippine shares down nearly 2%
* Most Asia FX firm against a weaker USD
By Shriya Ramakrishnan
Aug 19 (Reuters) - The Indonesian rupiah gained on Wednesday after the central bank, as expected, kept interest rates unchanged, while the Philippines led losses for emerging Asian stock markets after reporting a huge spike in coronavirus infections.
Bank Indonesia (BI), which had cut borrowing costs four times this year to their lowest since 2016, said current rates of 4.0% were consistent with efforts to keep the economy moving in the face of the COVID-19 pandemic. rupiah IDR= strengthened 0.5% against the dollar after the decision, while shares in Jakarta .JKSE slipped 0.3%.
"Despite room for another round of policy rate cut being wide-open, BI should refrain from doing so, since they have to maintain interest rate differential to keep IDR on the appreciation path against the USD," said Anthony Kevin, an economist at Mirae Asset Sekuritas.
The currency has depreciated about 6% against the dollar so far in 2020, making it the worst performer in the region. However, with rates between zero to negative in most developed economies, Indonesia's government bonds still offer an attractive premium.
Yields on the country's three-year government bonds ID3YT=RR swung widely in a volatile session and were down around 5 basis points at 5.468% after the decision. Benchmark 10-year yields ID10YT=RR fell 3 basis points to 6.726%.
Recent weak inflation readings have driven investors more heavily into the short end of Indonesia's yield curve, pushing the spread between one-year and ten-year debt to its widest since 2011.
The country's inflation rate eased in July to 1.54% from 1.96% a month earlier, falling further from the central bank's target range of 2% to 4% for 2020. markets across the region were largely downbeat despite strong leads from Wall Street overnight, with Chinese equities .SSEC down more than 1% as profit-taking emerged after a strong rally.
Philippine shares .PSI fell nearly 2% and the peso PHP= dipped as the rise in coronavirus infections showed no signs of abating, topping 3,000 new cases for a seventh straight day in what is Southeast Asia's biggest outbreak. Korean shares .KS11 gained about 0.5%, recovering from a 2.5% decline in the previous session, though gains were somewhat limited by the biggest one-day jump in domestic coronavirus cases in more than five months.
Asia stock indexes and
currencies at 0734 GMT
COUNTRY FX RIC
FX FX YTD INDEX STOCKS STOCK
DAILY S YTD
-0.08 +2.95 <.N225
+0.04 +0.63 <.SSEC -1.24 11.74 > > India INR=IN -0.14 -4.65 <.NSEI 0.44 -6.02 > Indonesi
+0.51 -5.93 <.JKSE -0.33 -16.2 a > 2 Malaysia
+0.05 -2.13 <.KLSE -0.26 -0.95 > Philippi
-1.86 -22.6 nes
+0.04 +0.63 <.SSEC -1.24 11.74
-0.14 -4.65 <.NSEI
+0.51 -5.93 <.JKSE -0.33 -16.2 a
2 Malaysia MYR=
+0.05 -2.13 <.KLSE -0.26 -0.95
-0.08 +4.28 .PSI
-1.86 -22.6 nes
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