EMERGING MARKETS-Thai baht set for worst month in over 21 years, leads Asian FX lower

    * Thai warns economy remains fragile, exposed to
    * Philippines to continue easy money policy to support
    * Singapore seen holding rates at October review -

    By Arundhati Dutta
    Sept 30 (Reuters) - The Thai baht hovered around a more than
four-year low on Thursday, and was headed for its biggest
monthly drop since July 2000, as the dollar gained on concerns
over tapering plans by the U.S. Federal Reserve.
    The baht, which has been the region's worst
performing currency in 2021 with an over 11% drop, was at its
weakest since July 2017, while the greenback was near a one-year
high on worries that the Fed could start hiking interest rates
in 2022.
    The Bank of Thailand on Wednesday left its policy rate
unchanged and signalled no reduction despite the tourism-reliant
economy being hammered by a COVID-19 outbreak earlier this year,
a move that analysts said would help catch the baht's
    The country's central bank said the economy remains fragile
and has limited capacity to withstand shocks due to high
external dependence amid a severe COVID-19 outbreak. 
    A Reuters poll expects Singapore's central bank to leave
monetary policy on hold at its October review, while the
Philippine central bank promised to continue with accommodative
policy settings until economic recovery gets fully underway.

    Both countries have seen new infections surge over the past
few weeks.
    The index of emerging Asian currencies was
on track for its worst month since March 2020. The Indonesian
rupiah and the baht led regional currencies lower, with a
0.3% drop each. 
    The dollar would continue to gain and pressurize Asian
currencies if the Fed was indeed trying to move out of its
pandemic-era accommodative stance, Jeffrey Halley, a market
analyst at OANDA wrote in a note.
    "A disconnect between Asian and U.S. monetary policy has
negative implications for most of Asia unless they want to start
burning through foreign currency reserves," he added.
    As COVID-19 raged across Southeast Asia, MSCI's broadest
index of Asia-Pacific shares outside Japan was
set for its worst quarter since the pandemic first hit.
    For the day, most equity markets in the region rose as
investors scooped up cheap stocks after last two days'
China-driven sell-off, with Indonesia leading gains with
a 1% jump.
     The Indonesian Parliament approved President Joko Widodo's
$190 billion budget for next year.
    A power supply crunch in China due to demand-supply
imbalance of coal has led to factory shutdowns across the
country, making investors jittery that it may have a knock-on
effect on China-reliant emerging Asian economies.
    Investors also cheered reports here
 that the U.S. Senate was working to fund federal agencies until
early December to avert a government shutdown. 
    **Indonesian 10-year benchmark yields up 1.5 basis points at
    **Thailand's 3-year benchmark yield up 3 basis points at
  Asia stock indexes and currencies                       
 at   0718 GMT                                      
                      DAILY %  YTD %     X   DAILY   YTD %
 Japan                  -0.04  -7.83  <.N2   -0.3    7.3
 China     <CNY=CFXS    +0.08  +0.96  <.SS    0.90    2.74
           >                          EC>           
 India                  -0.16  -1.62  <.NS   -0.16   26.47
 Indonesi               -0.28  -2.02  <.JK    1.26    4.36
 a                                    SE>           
 Malaysia               -0.08  -3.99  <.KL   -0.23   -5.11
 Philippi               -0.11  -5.78  <.PS    0.27   -2.62
 nes                                  I>            
 S.Korea   <KRW=KFTC    -0.19  -8.26  <.KS    0.28    6.80
           >                          11>           
 Singapor               -0.07  -2.99  <.ST    0.53    8.68
 e                                    I>            
 Taiwan                 -0.12  +2.26  <.TW    0.47   14.95
 Thailand               -0.27  -11.7  <.SE   -0.23   11.31
                                   3  TI>           
 (Reporting by Arundhati Dutta in Bengaluru; Editing by Rashmi