* Ringgit pares losses after sharp fall
* Rupee inches up ahead of inflation data
* Rupiah slips, eyes on central bank meet later in week
(Adds text, updates prices)
By Nikhil Nainan
May 14 (Reuters) - The Malaysian ringgit pared losses after
falling to its lowest in over a year on Monday following last
week's shock election upset, while most other Asian currencies
gained on the dollar.
The ringgit fell as much as 0.9 percent as Malaysian
markets reopened for the first time since Wednesday's general
election, but clawed its way back and was up marginally at 3.946
per dollar by midday.
Veteran politician Mahathir Mohamad came out of retirement
to lead the opposition to victory over a ruling party he had
once led, defeating prime minister Najib Razak Najib.
On Saturday, Mahathir appointed Lim Guan Eng as finance
minister, best known as the chief minister of Penang, the second
richest state in the country, a move seen by many as investor
Mizuho Bank, in a note, said the appointment is expected to
"underscore market confidence", alluding to his achievements in
Some investors were concerned over the populist economic
policies of the new government, including plans to remove a
goods and service tax. But some analysts thought the moves could
boost domestic demand.
The dollar index against a basket of six major currencies
edged lower at 92.537 0530 GMT.
South Korea's won gained 0.2 percent, as
sustained progress with North Korea soothed markets.
Over the weekend, North Korea said it would dismantle its
nuclear bomb test site, a move that prompted the U.S. to propose
lifting sanctions on the reclusive state.
North Korea's overtures come ahead of Kim Jong Un's meeting
with U.S. President Donald Trump in Singapore on June 12.
The Thai baht strengthened to 31.83 against the
dollar, ahead of the country's central bank meet to decide the
1-day repo rate on Wednesday.
"We see no change for the upcoming policy meeting, given
that Thailand's underlying inflation has been undershooting
target," Mizuho Bank said.
The rupee edged higher as investors awaited
inflation data expected later on Monday, and a day ahead of
results from the elections in the southern state of Karnataka.
Exit polls suggest Narendra Modi's BJP could emerge as the
leading party ahead of next year's general election.
Inflation is expected to climb in April on the back of
higher oil prices, intensifying pressure on the Reserve Bank of
India (RBI) to hike rates, a Reuters poll showed.
DBS in a note said it expects a more hawkish RBI, "with more
committee members expected to shift from the neutral to the
"India's consumer price index could remain sticky at around
4.5 percent year-on-year, but a downside surprise should be
Indian rupee positive, given that markets are fretting over a
hawkish RBI," Mizuho Bank added.
India, a net oil importer, has been particularly watchful
over rising oil prices and developments on Iran.
Indonesia's rupiah slipped 0.3 percent to 13,985 a
dollar following several bomb attacks across the
"Yesterday's terrorist bombings in Surabaya churches may
rattle the market," said Trimegah Securities in Jakarta, though
"expect any decline because of bombing to be very short-term."
With the rupiah hovering around 2018 lows, Moody's said the
weakness in the currency and interest rates would be "credit
negative" if it persists.
Moody's comments come ahead of a central bank policy review
later in the week. Some analysts say they would not be surprised
to see an interest rate hike to support the currency, though
others believe such a move may already be priced in.
"The Indonesian rupiah may outperform if Bank Indonesia
hikes rates by 25bps as we expect, giving teeth to their defence
against further rupiah depreciation," added Mizuho Bank in a
CURRENCIES VS U.S. DOLLAR
Change on the day at 0528 GMT
Currency Latest bid Previous day Pct Move
Japan yen 109.410 109.38 -0.03
Sing dlr 1.333 1.3360 +0.25
Taiwan dlr 29.719 29.773 +0.18
Korean won 1067.100 1069.3 +0.21
Baht 31.830 31.9 +0.22
Rupiah 13985.000 13945 -0.29
Rupee 67.283 67.33 +0.06
Ringgit 3.946 3.948 +0.05
Yuan 6.340 6.3323 -0.12
Change so far in 2018
Currency Latest bid End 2017 Pct Move
Japan yen 109.410 112.67 +2.98
Sing dlr 1.333 1.3373 +0.35
Taiwan dlr 29.719 29.848 +0.43
Korean won 1067.100 1070.50 +0.32
Baht 31.830 32.58 +2.36
Rupiah 13985.000 13565 -3.00
Rupee 67.283 63.87 -5.07
Ringgit 3.946 4.0440 +2.48
Yuan 6.340 6.5069 +2.63
(Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Kim