EM ASIA FX-Asian currencies fall on fear of wider U.S-China trade war

(Adds comments, details on rupee and rupiah, updates numbers)

By Patturaja Murugaboopathy

Sept 17 (Reuters) - Most Asian currencies dropped

significantly on Monday on worries that the U.S-China trade

dispute could escalate, deepening fears of a global trade war.

The two emerging Asian currencies most under pressure - the

Indonesian rupiah and the Indian rupee - both

fall sharply, partly because of worries on the global picture

and because of domestic factors.

U.S. President Donald Trump is likely to announce tariffs on

about $200 billion on Chinese imports as early as Monday, a

senior administration official told Reuters on Saturday.

Other media reports say U.S. action would prompt immediate

retaliation from China, which might cancel plans to send senior

officials to Washington for trade talks soon.

Last week, Asian currencies were propped up by prospects of

renewed talks between the world's two biggest economies.

But implementation of fresh tariffs by Trump administration

could prompt investors to discard regional assets and seek

refuge in the dollar.

Vishnu Varathan, head of economics and strategy for Mizuho

Bank in Singapore, said another round of tit-for-tat tariffs

between the US and China would "sour the stage for high-level

US-China trade talks", in turn unnecessarily raising the bar for

an agreement between the two giants.

The biggest loser early on Monday was the Indian rupee,

down 1.1 percent, followed by the South Korean won,

off 1.07 percent.

With a fall of nearly 12 percent, the Indian rupee is

Asia's worst performing currency against the dollar this year.

On Friday, the Indian government announced steps on Friday to

stem its decline.

India's finance minister said the government plans to cut

down "non-necessary" imports, ease overseas borrowing norms for

the manufacturing sector and relax rules around banks raising

rupee-denominated overseas bonds.

However, analysts doubt the government's steps will stem

rupee's declines.

"The rupee is unlikely to get much support from measures to

support the rupee," MUFG Bank said on Monday, saying the steps

are "deemed to be insufficient" to stop the declines.

"In an environment of rising interest rates, corporates may

refrain from obtaining more overseas loans, and in a risk-off

environment when foreign investors are net sellers of both

Indian equities and bonds, raising the FPI (foreign portfolio

investment) limits is unlikely to yield more capital inflows,"

it said.

The Indonesian rupiah was down more than 0.5 percent for the

day after the government posted a bigger-than-expected trade

deficit for August.

Southeast Asia's largest economy had a trade deficit of

$1.02 billion, much larger than the $680 million expected in a

Reuters poll.

The rupiah has fallen nearly 9 percent this year and is the

region's second worst-performing currency.

To help the rupiah, the Indonesian central bank has raised

interest rates four times since mid-May, and many analysts

expect another hike this month.

The following table shows rates for Asian currencies against

the dollar at 0508 GMT.

CURRENCIES VS U.S. DOLLAR

Change as of

0508 GMT

Currency Latest bid Previous day Pct Move

Japan yen 111.990 112.04 +0.04

Sing dlr 1.375 1.3740 -0.09

Taiwan dlr 30.796 30.760 -0.12

Korean won 1128.000 1116.6 -1.01

Baht 32.660 32.54 -0.37

Peso 54.090 53.97 -0.22

Rupiah 14885.000 14800 -0.57

Rupee 72.635 71.85 -1.09

Yuan 6.870 6.8680 -0.03

*Malaysian markets are closed for

holiday

Change so far in 2018

Currency Latest bid End 2017 Pct Move

Japan yen 111.990 112.67 +0.61

Sing dlr 1.375 1.3373 -2.76

Taiwan dlr 30.796 29.848 -3.08

Korean won 1128.000 1070.50 -5.10

Baht 32.660 32.58 -0.24

Peso 54.090 49.93 -7.69

Rupiah 14885.000 13565 -8.87

Rupee 72.635 63.87 -12.07

Ringgit 4.137 4.0440 -2.25

Yuan 6.870 6.5069 -5.29

(Reporting by Patturaja Murugaboopathy in Bengaluru; Editing by

Richard Borsuk)