Thai baht scales 5-month high on foreign inflows

  • Thai baht leads gains among mixed Asian currencies
  • Indonesian rupiah hits highest since Jan. 11
  • Philippines peso, shares down ahead of c.bank meeting

Feb 15 (Reuters) - The Thai baht hit a five-month high on Tuesday, as higher gold prices and continued foreign fund flows into stocks and bonds boosted the currency, while concerns surrounding Ukraine weighed on most other Asian currencies.

The South Korean won declined 0.7% in its worst session since Dec. 20, retreating after Monday's 0.6% gain. The Indonesian rupiah rose, while the Philippine peso and the Indian rupee eased.

The baht firmed up to 0.7% in its second straight session of gains, boosted by rising gold prices as sales of the metal in U.S. dollars and conversion into local currency pushed it higher.

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"There is a combination of factors that has led to the Thai baht beating its peers," said Mitul Kotecha, a senior EM strategist at TD Securities, citing reasons like optimism over lesser COVID-19 restrictions despite rising cases, and gold prices touching an eight-month high.

Moreover, Thai bonds received $2.08 billion worth of overseas inflows in January, the highest since July 2014, on the back of rising exports and easing COVID-19 restrictions. read more

Lesser pressure to hike interest rates since inflation is within the central bank's mandate has spurred hopes for an economic recovery, said Kobsidthi Silpachai, head of capital markets research at Kasikornbank.

Heightened tensions between Russia and the West over Ukraine have kept investors wary of riskier assets. Market participants are also waiting for the minutes of the U.S Federal Reserve's last policy meeting, expected on Wednesday, which could give further clues to the pace of interest rates hikes. read more

The Indonesian rupiah firmed 0.4% to its highest since Jan. 11, after data showed the resource-rich nation's trade surplus rose more than expected last month, despite export growth missing forecast due to a ban on coal exports in the first week of 2022. read more

Higher energy prices underpinned the Malaysian ringgit , which rose for a third consecutive session. Malaysia is one of the world's largest exporters of liquefied natural gas.

Asian equities were mixed, with Indonesian shares (.JKSE) rising about 0.9% to lead gains.

Thai (.SETI), Malaysian (.KLSE) and Indonesian (.JKSE) markets rose in the range of 0.3% and 0.7%. Shares in Singapore (.STI), the Philippines (.PSI) and South Korea (.KS11) were down between 0.3% and 1%.

On Thursday, the Philippines central bank is likely to stay pat on interest rates to support economic growth, according to a Reuters poll. read more

HIGHLIGHTS

** Indian shares (.NSEI) gain after sell-off fuelled by Ukraine tensions

** Indonesian 10-year benchmark yields edge up to 6.516%

** Yuan wobbles revive worries about Asia's vulnerabilities - analysis read more

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Reporting by Archishma Iyer; Editing by Subhranshu Sahu

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