EM ASIA FX-Baht at 16-year high, exporters lift ringgit; Cyprus vote eyed

* Thai c.bank: firm baht is not a concern * Ringgit up as specs cover short positions * Won gains on exporters, stop-loss dollar selling (Adds text, updates prices) By Jongwoo Cheon SINGAPORE, March 19 (Reuters) - The Thai baht hit its highest since the start of the 1997-98 Asian financial crisis, as sustained inflows on Tuesday gave it the biggest gains among emerging Asian currencies at a time investors stayed wary about Cyprus. The baht also found support from short-covering and the central bank reiterated that the currency's strength is not a concern. The Malaysian ringgit rose on similar position adjustments and exporters' demand. The South Korean won also gained as exporters' bids prompted interbank speculators to cover short positions. Such appreciation among currencies came as risk sentiment recovered partially, supporting regional stocks, after news on Monday that the Eurogroup decided to give Cyprus more flexibility over a contentious bank levy that is part of the bailout conditions. "The Cyprus issue will affect European peripherals more, while in Asia if there is any impact, it would be through the risk sentiment channel," said Frances Cheung, senior strategist at Credit Agricole CIB in Hong Kong. "I still see appetite for Asian assets, which will continue to attract inflows. Unless there is a collapse in risk appetite, flows will be driven more by fundamentals," Cheung added. The Cyprus parliament will vote on Tuesday on a 10-billion-euro ($13 billion) bailout deal struck in Brussels over the weekend. The deal, which imposes a levy on bank deposits, has raised fears of a run on banks that could spread to larger states still seen as possible bailout candidates. But the lawmakers are unlikely to pass legislation taxing deposits which has prompted turmoil in its banking system, falling short on a condition for an international bailout, government spokesman Christos Stylianides said. Some investors remained concerned over the potential for Cyprus to spark a general retreat from riskier assets, which would slow hot money inflows to the region. "If Cyprus risk spreads, Asian FX will definitely get hurt and India will be the most vulnerable followed by Indonesia," said Sean Yokota, head of Asia Strategy at Scandinavian bank SEB in Singapore. As those two countries have current account deficits, the Indian rupee and the Indonesian rupiah "will be impacted the most by slowdown in capital flows," he added. The rupee turned weaker on political uncertainties, while the rupiah underperformed most of its peers by staying almost flat. Economies that run current account deficits such as India and Indonesia "are probably the most vulnerable as those are ones with large foreign banking claims, particularly from Europe. India again heads the top of this list," said Jonathan Cavenagh, a senior FX strategist at Westpac in Singapore. The rupee and rupiah are not the only currencies in Asia that could be vulnerable to contagion risk from Cyprus, analysts said. Saktiandi Supaat, head of FX research for Maybank in Singapore, said the won, the ringgit and the Singapore dollar are seen as more susceptible because they are more sensitive to risk aversion. Emerging Asian currencies also face other hurdles to appreciate such as expectations of a weaker yen due to the Bank of Japan's expansionary policy, analysts said. A weaker yen is seen biting into export competitiveness of some Asian countries, particularly South Korea, while others have warned of steps to curtail hot money inflows. "With the European crisis having flared up again, China's recovery being questioned and the Japanese yen remaining weak, you will see Asia ex-Japan currencies remaining under some pressure in the immediate term before they can find a more sustained floor," said Callum Henderson, global head of FX research with Standard Chartered in Singapore. BAHT The baht rose as much as 0.8 percent to 29.30 per dollar, its strongest in 16 years, according to Thomson Reuters data, on inflows and short-covering. "The baht is truly amazing. Stocks and bonds are bullish there. The baht has more room to appreciate, although the trend may slow down when it gets around 29.00 (per dollar)," said a European bank trader in Singapore. "Cyprus is unlikely to have a big impact there," said the trader. On Monday, some interbank speculators built short positions in the baht in anticipation that concerns over Cyprus would damage sentiment, but on Tuesday they were forced to cover those positions to stop losses, traders said. The baht is seen as technically overbought with the dollar/baht's 14-day relative strength index at 20.9, well below the 30-threshold, making it ripe for profit taking, according to some traders. Still, investors remained bullish, given the sustained inflows into baht to fund Thai infrastructure projects, analysts and traders said. The baht has been the best performing emerging Asian currencies this year with a 4.3 percent gain against the dollar, Thomson Reuters data showed. The Thai currency has enjoyed inflows as investors ride on strong economic fundamentals and seek higher yields. Japanese manufacturers, such as car makers, also are increasing their Thai investments, taking advantage of the Bank of Japan's monetary policy easing. In January, Toyota Motor Corp's said it would invest 12 billion baht ($406.09 million), while Honda Motor said in February it would spend more than 2 billion baht for a new assembly plant. RINGGIT The ringgit gained as interbank speculators cleared dollar-long positions on exporters' demand for the Malaysian currency for settlements. Investors stayed cautious over the Cyprus situation, but some traders were looking to buy the ringgit on dips. "Unless something big blows up, such as contagion to Spain or Portugal, dollar/ringgit may fall a bit further," said a Malaysian bank trader. WON The won rose on exporters' bids and stop-loss dollar selling. But its upside was limited as offshore funds sold it on rallies on the euro zone concerns. Importers also bought dollars for payments, traders said. "It was difficult to buy the won, given the Cyprus vote and the Fed's coming meeting," said a South Korean bank trader in Seoul, referring to the Federal Reserve's policy meeting on Tuesday and Wednesday. CURRENCIES VS U.S. DOLLAR Change on the day at 0818 GMT Currency Latest bid Previous day Pct Move Japan yen 95.35 95.20 -0.16 Sing dlr 1.2498 1.2498 +0.00 Taiwan dlr 29.789 29.815 +0.09 Korean won 1111.55 1114.60 +0.27 Baht 29.34 29.53 +0.63 Peso 40.69 40.71 +0.05 Rupiah 9710.00 9709.00 -0.01 Rupee 54.31 54.17 -0.27 Ringgit 3.1200 3.1300 +0.32 Yuan 6.2161 6.2158 -0.00 Change so far in 2013 Currency Latest bid End prev year Pct Move Japan yen 95.35 86.79 -8.98 Sing dlr 1.2498 1.2219 -2.23 Taiwan dlr 29.789 29.136 -2.19 Korean won 1111.55 1070.60 -3.68 Baht 29.34 30.61 +4.33 Peso 40.69 41.05 +0.90 Rupiah 9710.00 9630.00 -0.82 Rupee 54.31 54.99 +1.25 Ringgit 3.1200 3.0580 -1.99 Yuan 6.2161 6.2303 +0.23 ($1 = 0.7717 euros) ($1 = 29.5500 Thai baht) (Additional reporting by Yena Park in SEOUL; Editing by Richard Borsuk)