CORRECTED-EMERGING MARKETS-Indonesian rupiah gains as keeps rates unchanged

 (Corrects first bullet in highlights to say stocks are down)
    * Graphic: World FX rates
    * Graphic: Foreign flows into Asian stocks
    * Bank Indonesia keeps key rate steady at 4%
    * Philippine shares down nearly 2%
    * Most Asia FX firm against a weaker USD

    By Shriya Ramakrishnan
    Aug 19 (Reuters) - The Indonesian rupiah gained on Wednesday
after the central bank, as expected, kept interest rates
unchanged, while the Philippines led losses for emerging Asian
stock markets after reporting a huge spike in coronavirus
    Bank Indonesia (BI), which had cut borrowing costs four
times this year to their lowest since 2016, said current rates
of 4.0% were consistent with efforts to keep the economy moving
in the face of the COVID-19 pandemic.
    The rupiah strengthened 0.5% against the dollar after
the decision, while shares in Jakarta slipped 0.3%. 
    "Despite room for another round of policy rate cut being
wide-open, BI should refrain from doing so, since they have to
maintain interest rate differential to keep IDR on the
appreciation path against the USD," said Anthony Kevin, an
economist at Mirae Asset Sekuritas.
    The currency has depreciated about 6% against the dollar so
far in 2020, making it the worst performer in the region.
However, with rates between zero to negative in most developed
economies, Indonesia's government bonds still offer an
attractive premium.
    Yields on the country's three-year government bonds
 swung widely in a volatile session and were down
around 5 basis points at 5.468% after the decision. Benchmark
10-year yields fell 3 basis points to 6.726%. 
    Recent weak inflation readings have driven investors more
heavily into the short end of Indonesia's yield curve, pushing
the spread between one-year and ten-year debt to its widest
since 2011. 
    The country's inflation rate eased in July to 1.54% from
1.96% a month earlier, falling further from the central bank's
target range of 2% to 4% for 2020.
    Stock markets across the region were largely downbeat
despite strong leads from Wall Street overnight, with Chinese
equities down more than 1% as profit-taking emerged
after a strong rally.
    Philippine shares fell nearly 2% and the peso
dipped as the rise in coronavirus infections showed no signs of
abating, topping 3,000 new cases for a seventh straight day in
what is Southeast Asia's biggest outbreak.
    South Korean shares gained about 0.5%, recovering
from a 2.5% decline in the previous session, though gains were
somewhat limited by the biggest one-day jump in domestic
coronavirus cases in more than five months. 
    ** In the Philippines, top index losers are Bank of the
Philippine Islands down 4.87% at 62.5 peso; GT Capital
Holdings Inc down 4.01% at 407 peso
    ** Top losers on FTSE Bursa Malaysia Kl Index
include Hartalega Holdings Bhd down 3.42% at 16.96
ringgit; Genting Bhd down 2.31% at 3.8 ringgit
    ** Top losers on the Singapore STI include: Singapore
Airlines Ltd down 1.88% at S$0.625; Thai Beverage PCL
 down 1.57% at S$3.65
  Asia stock indexes and                                    
 currencies at   0734 GMT                              
                      DAILY %       %           DAILY  S YTD
                                                    %      %
 Japan                  -0.08   +2.95  <.N225    0.26  -2.31
 China     <CNY=CFXS    +0.04   +0.63  <.SSEC   -1.24  11.74
           >                           >               
 India                  -0.14   -4.65  <.NSEI    0.44  -6.02
 Indonesi               +0.51   -5.93  <.JKSE   -0.33  -16.2
 a                                     >                   2
 Malaysia               +0.05   -2.13  <.KLSE   -0.26  -0.95
 Philippi               -0.08   +4.28           -1.86  -22.6
 nes                                                       9
 S.Korea   <KRW=KFTC    +0.21   -2.10  <.KS11    0.52   7.41
           >                           >               
 Singapor               -0.04   -1.50           -0.04  -20.5
 e                                                         0
 Taiwan                 +0.47   +2.47  <.TWII   -0.73   6.51
 Thailand               -0.22   -4.10  <.SETI   -0.50  -16.2
                                       >                   3

 (Reporting by Shriya Ramakrishnan in Bengaluru; Editing by
Patrick Graham and Arun Koyyur)

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