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EMERGING MARKETS-Indian rupee jumps after RBI's rate hike, Thai baht firms 1%

    * Thai baht, S. Korean won firm about 1% each
    * India's RBI hikes by 50 bps
    * Indonesia Q2 GDP +5.4%, fastest growth rate in a year
    * Taiwan, China shares soar, while Malaysia falls

    By Sameer Manekar
    Aug 5 (Reuters) - The Indian rupee firmed on Friday after
the Reserve Bank of India (RBI) announced its third rate hike in
as many months, while the Thai baht strengthened more than 1% on
potential start of policy tightening next week.
    The RBI raised its repo rate by 50 basis points (bps) as
June retail inflation hit 7%. Economists expect more hikes ahead
as inflation is seen holding at the central bank's top end of
the 2%-6% tolerance band for the rest of the year.
    Given the risks that sustained high inflation could
destabilise inflation expectations and that inflation will
remain above target band for a few more months, the RBI will
continue to hike rates over the next few months, Mitul Kotecha,
head of emerging markets strategy at TD Securities said.
    "Like other Asian currencies, the rupee has benefited from a
recent drop in the U.S. dollar. Having pulled back from a breach
of 80, we continue to expect some consolidation in the near
term." 
    The Indian rupee firmed up to 0.7%, while the
10-year bond yields — providing one of the highest
returns in the region — jumped 9.4 bps to 7.251%. The rupee was
set to end the week about 0.2% in black, its third straight
weekly gain.
    Next week, India's inflation data is expected to show that
headline inflation remained above the RBI's target band in July,
giving it space to continue its tightening cycle.
    Meanwhile, the Thai baht rose 1% as investors began
pricing in the first rate hike since late-2018 as the pace of
inflation remained near a 14-year high in July.
    Sunthorn Thongthip, a strategist at Kasikorn Securities said
Kasikornbank expects the Bank of Thailand (BoT) to hike by 25
bps on Aug. 10, given "low oil price and improving tourist
arrivals resulting in better current account".
    Kasikornbank sees the policy rate to rise to 1% by the end
of this year.
    Tim Leelahaphan, an analyst at Standard Chartered, who also
expects a 25 bps hike next week, however sees concerns lingering
over narrow policy space for the BoT to move, given growing
recession fears and talk of rate cuts in the U.S. next year.
    Standard Chartered forecasts a total 75 bps hike this year
by the BoT, taking the interest rate to 1.25%, and sees a
gradual interest rate normalisation path in 2023-24, Leelahaphan
added.
    Among other currencies, the Philippine peso added
0.7% as pressure to tighten monetary policy persisted on the
country's central bank on a strong inflation print for July. The
unit was set to post third straight weekly gain.
    Analysts at ING and Barclays expect a 50 bps hike from the
Bangko Sentral ng Pilipinas (BSP) on Aug. 18, after an aggregate
125 bps hike since May.
    Indonesia's rupiah also appreciated 0.2% as data
showed economic growth in Southeast Asia's biggest economy
accelerated in the June quarter, boosted by an export boom.
However, rising inflation and monetary tightening clouded the
outlook.
    Equities were largely mixed, with shares in India,
South Korea and Taiwan advancing 0.3%-2%, while
Malaysia fell 0.5%.

    HIGHLIGHTS:    
    ** Indonesian 10-year benchmark yields falls 7.7 basis
points to 7.138%
    ** Indonesia optimistic 5.2% 2022 GDP growth target to be
achieved - govt
    ** Japan's economy likely rebounded in Q2 with unleashing of
consumers - Reuters poll
    
 Asia stock                                                          
 indexes and                                                         
 currencies                                                          
 at 0639 GMT                                                         
 COUNTRY       FX         FX         FX          INDEX    STOCKS     STOCKS
                 RIC        DAILY %    YTD %                DAILY %    YTD %
 Japan                    -0.29      -13.63               0.87       -2.14
 China         <CNY=CFXS  +0.03      -5.80                0.91       -11.58
               >                                                     
 India                    +0.28      -6.20                0.31       0.47
 Indonesia                +0.18      -4.38                0.19       7.43
 Malaysia                 +0.02      -6.53                -0.49      -2.42
 Philippines              +0.47      -7.74                -1.08      -9.96
 S.Korea       <KRW=KFTC  +0.91      -8.45                0.72       -16.35
               >                                                     
 Singapore                +0.02      -1.93                0.38       5.07
 Taiwan                   +0.11      -7.63                2.27       -17.47
 Thailand                 +0.87      -6.37                -0.12      -3.66
 
    

 (Reporting by Sameer Manekar in Bengaluru; editing by
Uttaresh.V)
  
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