Rupiah, ringgit barely move after rate decisions

Malaysia's ringgit hardly budged on Thursday after the country's central bank left interest rates unchanged for the first time since tightening started last May, while the Indonesian rupiah also did not move even after a quarter-point rate hike.

Bank Negara Malaysia (BNM) unexpectedly kept its benchmark interest rate unchanged at 2.75%, saying it was assessing the impact of four consecutive rate hikes delivered last year.

The Malaysian ringgit USDMYR was down 0.1% against the dollar, unchanged from pre-decision levels, while stocks in Kuala Lumpur BURSA were listless.

"The Malaysian central bank decision was a surprise hold," said Christopher Wong, a currency strategist from OCBC.

"This now raises the question if central banks in the region are starting to pause for good or to pause to assess cumulative rounds of tightening in 2022 to get a gauge on the impacts on the real economy."

Indonesia's central bank hiked its key policy rate by 25 basis points in its sixth straight increase since last August, raising the 7-day reverse repurchase rate to 5.75%, in line with expectations.

The Indonesian rupiah USDIDR was last down 0.2%, unmoved after the rate decision, while stocks in Jakarta COMPOSITE rose 0.7%.

Even though the hike was expected, there are doubts if Bank Indonesia is near the end of its tightening cycle, since supporting growth will likely be the focus of policymakers especially if inflation does show signs of peaking, Wong said.

Elsewhere in Asia, most Asian currencies weakened after weak economic data from the United States renewed recessionary fears.

Overnight, data showed U.S. retail sales fell by the most in a year in December, while manufacturing output recorded its biggest drop in nearly two years, pushing up demand for the safe-haven dollar.

Thailand's baht USDTHB emerged as the biggest loser among its peers, shedding as much as 1.1% and on track for its worst session in more than month if losses hold, as traders looked to favour the safe-haven greenback over emerging Asian currencies.

The Philippine peso USDPHP fell as much as 0.6%, while Singapore's dollar USDSGD slid 0.2%. The South Korean won USDKRW emerged as the only outlier, rising 0.4%.

Equities across the region remained mixed, with stocks in South Korea KOSPI rising 0.5%, while those in Singapore STI fell 0.4%.

HIGHLIGHTS:

** UPDATE 2-Drop in China-bound Japanese exports adds to fears of global downturn

** EXCLUSIVE-Vietnam market risks missing 2025 deadline for upgrade to emerging status - sources

** Indonesia's 2022 oil lifting miss target, hopes stalled projects to resume