EMERGING MARKETS-Asian FX, stocks up; Malaysian ringgit rises after c.bank holds rates

* Singapore dollar hits 1-month high * Taiwan stocks hit record high * Malaysia c.bank keeps rates unchanged (Updates at 0725 GMT) By John Biju March 7 (Reuters) - The Malaysian ringgit extended gains on Thursday after the country's central bank kept interest rates unchanged, while growing bets of U.S. rate cuts later this year buoyed other currencies and equities. The Malaysian ringgit climbed as much as 0.7% to hit its highest level since Jan. 17. Equities in the country edged 0.1% higher. The Bank Negara Malaysia (BNM) kept its benchmark interest rate unchanged, as anticipated, while indicating expectations for improved economic growth in 2024, driven by export recovery and resilient domestic expenditure. "We remain of the view that BNM is likely to keep OPR unchanged throughout this year," Frances Cheung, a rates strategist at OCBC said referring to Malaysia's overnight policy rate. "The remarks on the ringgit echoed the earlier shift in stance, from one which saw MYR weakness as driven by external factor to one which saw MYR is fundamentally undervalued," Cheung added. The central bank's decision follows a recent depreciation in the ringgit to a 26-year low in February, with the bank assuring that the fall primarily stemmed from external factors and did not reflect the positive prospects of the country's economy. Although the currency has been recovering its losses, it is remains down 2.3% for the year. Other regional currencies advanced, with the Singapore dollar climbing up to 0.2% to hit its highest level in a month. The Indonesian rupiah added as much as 0.4%. Equities in Taiwan rose as much as 1.5% to reach a new peak, while stocks in Indonesia gained up to 0.7%, marking their highest level since early January. U.S. Federal Reserve Chair Jerome Powell, in his testimony to lawmakers on Wednesday, said that rate reductions would "likely be appropriate" later this year, although with a caveat that progress on inflation "is not assured." As long as the market continues to believe that the Fed will cut rates three times or potentially four, that could support Asian currencies in the near term, Poon Panichpibool, a markets strategist at Krung Thai Bank, said. "However, the risk could be that if the U.S. economic data remain strong or beat market expectations clearly ... I would expect another round of selling pressures on Asian FXs." Elsewhere, the Egyptian pound fell as low as 50.75 to the dollar for the first time on Wednesday, after its central bank devalued the currency and hiked interest rates by 600 basis points. The country then secured an expanded $8 billion deal with the International Monetary Fund. HIGHLIGHTS: ** Malaysia central bank taking action to encourage flows into FX market ** Japan sees growing momentum towards March end to negative rates ** China's Jan-Feb trade beats forecasts, signals global trade rebound Asia stock indexes and currencies at 0725 GMT Japan +0.80 -4.80 <.N2 25> -1.23 18.33 China EC> India +0.04 +0.50 <.NS 0.09 3.51 EI> Indones +0.32 -1.60 <.JK 0.61 1.40 ia SE> Malaysi +0.70 -2.28 <.KL 0.14 5.43 a SE> Philipp -0.04 -0.84 <.PS -0.60 6.00 ines I> S.Korea 11> Singapo +0.14 -1.32 <.ST -0.09 -3.30 re I> Taiwan +0.14 -2.52 <.TW 1.00 9.83 II> Thailan +0.04 -4.00 <.SE 0.05 -3.15 d TI> (Reporting by John Biju in Bengaluru; Editing by Jacqueline Wong and Dhanya Ann Thoppil)