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EMERGING MARKETS-Malaysian shares fall 1% and ringgit eases on renewed political turmoil

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(Repeats for additional subscribers. No change to text.) * Malaysia central bank meeting later in the day * Ringgit at 8-month low * S. Korea won and stocks battered by virus surge * U.S. dollar at near 3-month high after Fed minutes By Anushka Trivedi July 8 (Reuters) - Malaysian shares fell 1% and the ringgit eased after the biggest political party of the country's ruling coalition called for Prime Minister Muhyiddin Yassin to resign at a time when the country remains in a COVID-19 lockdown. The ringgit slipped 0.3% to an eight-month trough, while stocks hit their lowest since November as United Malays National Organisation (UMNO) announced its decision after months of infighting, citing the government's failure to manage the pandemic effectively. It was unclear if Muhyiddin, who holds a slim majority, would be immediately unseated as the parliament is currently not in session and Malaysia has been under lockdown since June amid a fresh surge in coronavirus cases. The situation is becoming "increasingly precarious" and another political vacuum, as was created by the sudden resignation of Mahathir Mohamad last year, would lead to more drawn out negotiations, Mizuho analysts wrote. "Without a resolution to the political turmoil, COVID-19 could continue to cast its long shadow on the Malaysia's economic recovery," Mizuho said. Bank Negara Malaysia meets for a policy review later in the day against this backdrop, but is largely expected to leave interest rates untouched and instead provide liquidity measures to aid the struggling economy. Asian currencies stumbled against a buoyant dollar after minutes of the U.S. Federal Reserve's June policy meeting confirmed the world's biggest central bank was mulling tapering its asset buying programme, which could be as soon as this year. Leading losses in the region, the South Korean won slid 0.7% to a four-month low on a record jump in COVID-19 infections in the country, with officials tightening curbs further. Local stock index slid 0.8%. The Thai baht, the Indonesian rupiah and Singapore's dollar dropped 0.2% to 0.6%. Fed officials last month felt the U.S. economic recovery was taking hold but was surrounded with risks. However, "various participants" felt they should be prepared to start tapering as conditions for it would be "met somewhat earlier than they had anticipated," minutes of the meeting showed. HIGHLIGHTS ** Malaysia's 10-year benchmark yield was down 2.5 basis points at 3.148% ** Top losers on the Singapore STI include: Yangzijiang Shipbuilding Holdings Ltd down 2.1% and Comfortdelgro Corporation Ltd down 1.8% ** Top losers on Thailand's SETI include TU Dome Residential Complex Leasehold Property Fund down 10.3% and Food and Drinks PCL down 7.1% Asia stock indexes and currencies at 0410 GMT COUNTRY FX RIC FX DAILY % FX YTD % INDEX STOCKS DAILY % STOCKS YTD % Japan +0.12 -6.59 -0.72 2.62 China -0.11 +0.77 -0.57 1.74 India +0.00 -2.08 0.03 13.61 Indonesia -0.34 -3.37 0.25 1.34 Malaysia -0.22 -3.57 -0.98 -6.89 Philippines +0.00 -3.63 -0.17 -2.92 S.Korea -0.65 -5.19 -0.68 13.55 Singapore -0.19 -2.26 -0.61 9.79 Taiwan -0.09 +1.66 0.06 21.23 Thailand -0.62 -7.70 -0.75 7.97 (Editing by Sam Holmes)

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