* Graphic: World FX rates tmsnrt.rs/2egbfVh * Indonesia, Philippine central bank expected to stay on hold * Some see room for 25 bps rate cut given recent rupiah gains * South Korea, Thai central bank intervene to stem currency gains Nov 19 (Reuters) - Indonesia's rupiah fell half a percent on Thursday as markets toyed with the possibility of a surprise rate cut given its recent strength, while Asian stock markets faced downward pressure as COVID-19 cases and restrictions grow. Malaysia led declines in Asia's emerging equity markets, falling 1%, while Singapore and South Korea each fell 0.5%, tracking a late sell-off on Wall Street as the United States struggles to keep a lid on infections. Economists by and large expect Bank Indonesia to keep rates unchanged at 4% later in the day. However, the rupiah has gained over 3% this month alone and some see this as a potential trigger for a interest rate cut. "Market expectations are mixed heading into today's Bank Indonesia rate decision, divided between a pause and 25bp cut," DBS analysts wrote in a note. The yield on Indonesia's 10-year bonds rose 1.6 basis points to 6.197% on Thursday, but has fallen sharply since the U.S. election week. Yields rise as bond prices fall. Indonesia's high-yielding bonds are a favourite of foreign investors. The Philippine central bank is also expected to keep rates on hold at its meeting later, with the peso little changed. Stocks in Manila fell 0.6%. Broadly, currencies in the region were weaker, while South Korea's won slid 1% against the dollar after the government said it was taking action with stabilise the currency. Dealers told Reuters the central bank was suspected of buying dollars on Thursday to stem gains for a currency that has gained nearly 3% this month to Wednesday. Fresh from Wednesday's warning of the Thai baht's strength and its impact on exports, the central bank said it had intervened in the market. The currency dipped 0.1%. Recent vaccine news from Pfizer and Moderna , while triggering initial market boosts, have done little to assuage investors' concerns that the new wave of COVID-19 cases would dent any momentum for a global economic recovery. DBS analysts said emerging Asian currencies are unlikely to be spared from traders looking to cover their shorts, as "investors have found it increasingly difficult to extend the euphoria from the US elections and vaccine hopes." HIGHLIGHTS: ** Indonesian 3-year benchmark yields fell 1.7 basis points to 4.908% ** Hong Leong Bank Bhd and Public Bank Bhd led losses in Malaysian financials ** Resurgent IDR opens window for Bank Indonesia rate cut Asia stock indexes and currencies at 0342 GMT COUNTRY FX RIC FX FX INDEX STOCKS STOCKS DAILY % YTD % DAILY % YTD % Japan +0.08 +4.68 -0.63 8.08 China -0.05 +6.11 0.06 9.81 India +0.00 -3.79 0.00 6.33 Indonesia -0.50 -1.70 0.32 -11.50 Malaysia -0.22 -0.12 -0.97 0.03 Philippines -0.05 +4.94 -0.59 -10.30 S.Korea -0.97 +3.75 -0.54 15.20 Singapore -0.10 +0.08 -0.46 -13.88 Taiwan +0.89 +5.62 -0.50 14.23 Thailand -0.13 -1.42 0.58 -13.12 (Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Kim Coghill)
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