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EMERGING MARKETS-Asia FX, stocks falter as Fed, peers come into focus

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* Ringgit set for worst session since July 8 * Baht hits near 1-month low * Central bank meetings dominate weekly agenda * China, Japan, Taiwan, and South Korea markets shut By Shashwat Awasthi Sept 20 (Reuters) - The Malaysian ringgit was poised on Monday for its biggest intraday drop in 2-1/2 months and led losses among regional currencies as the U.S. dollar firmed at the start of a week, which is set to be dominated by at least a dozen central bank meetings. Regional stock markets fell sharply in holiday-thinned trading, taking cues from broader Asian equities, with shares in the Philippines, Thailand and Singapore tumbling between 0.6% and 0.8%. Policy meetings of central banks in China, Japan, Taiwan, Indonesia and the Philippines are due this week, headlined by the U.S. Federal Reserve as investors await further clues on asset purchase tapering. Indonesian equities lost more than 1% and the rupiah weakened ahead of a Bank Indonesia (BI) meeting due on Tuesday, in which the central bank is widely expected to keep its key interest rate steady. BI has kept rates at record lows since February as it tries to balance economic recovery with pressure exerted on the rupiah amid talks of stimulus tapering by the Federal Reserve. "We expect the policy rate to remain steady as we think that the central bank will play it safe in order to maintain the relatively strong position of the rupiah," Anthony Kevin, an economist at Mirae Asset Sekuritas said. The rupiah has weakened about 1.5% this year, but fared much better than most of its peers. A firmer dollar kept emerging market currencies subdued while escalating woes at indebted developer China Evergrande prompted traders to shun risk. Concerns around Evergrande's ability to meet its imminent payment obligations have cast a shadow over Asian markets in recent weeks as it poses broader risks to China's financial system. The Malaysian ringgit weakened 0.4% to its lowest since July 8 while stocks in Kuala Lumpur hit a near one-month low. Former Malaysian prime minister Najib Razak, who was convicted of corruption, told Reuters on Sunday that he had not ruled out seeking re-election to parliament, raising fears of more political uncertainty. Malaysia's traditional ruling party, the United Malays National Organisation, returned to power last month after coalition infighting unseated prime minister Muhyiddin Yassin. The Philippine peso lost 0.2% ahead of a Bangko Sentral ng Pilipinas (BSP) meeting this week. Though the central bank has vowed to keep its policy accommodative in the wake of the latest COVID-19 curbs, "the odds of additional BSP easing are very slim given the current unfriendly inflation backdrop," analysts at Dutch bank ING said. Last week, BSP sharply cut its current account surplus projection for this year and forecast a deficit next year, citing risks from the emergence of highly transmissible COVID-19 variants. HIGHLIGHTS: ** Thailand's 10-year benchmark yields are down 4 basis points at 1.8%. ** Top loser on the Jakarta stock index is Betonjaya Manunggal, down 6.9%. ** In the Philippines, top loser on the benchmark index is Alliance Global Group, down 5.2%. Asia stock indexes and currencies at 0653 GMT COUNTRY FX RIC FX FX INDEX STOCKS STOCKS DAILY % YTD % DAILY % YTD % Japan +0.11 -6.01 0.00 11.13 India -0.24 -0.79 -0.35 25.33 Indones -0.11 -1.40 -1.15 1.40 ia Malaysi -0.47 -4.05 -0.83 -5.62 a Philipp -0.24 -4.29 -0.79 -3.95 ines Singapo -0.22 -2.29 -0.66 7.28 re Thailan -0.39 -10.1 -0.59 11.50 d 9 (Reporting by Shashwat Awasthi; Editing by Sherry Jacob-Phillips)

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