REFILE-EMERGING MARKETS-Thai baht nurses losses as cenbank holds rate

(Corrects to add percentage change for Japan stocks in table) * Bank of Thailand maintains key policy rate * RBI raises key repo rate by 50 basis points * World Bank slashes 2022 global growth forecast By Tejaswi Marthi June 8 (Reuters) - The Thai baht nursed losses on Wednesday as the central bank held its key interest rate steady to support economic recovery, while Asian stocks tracked a Wall Street rally amid fears that aggressive central bank rate hikes could lead to stagflation. The baht was down 0.1% after easing 0.2% earlier in the session following the central bank's decision. The Bank of Thailand (BOT), however, raised its forecast for consumer price index to 6.2% in fiscal 2022, compared with its earlier view of 4.9%. Thai stocks were up 0.3% after the announcement. "While the outcome was widely expected, what is surprising that three of the seven panelists voted for a rate hike in this meeting, suggesting that the hiking cycle is imminent," said Poon Panichpibool, a markets strategist at Krung Thai Bank. Thailand's May headline inflation hit its highest level in nearly 14 years and prices are expected to continue rising. The consumer price index jumped 7.1% year-on-year, eclipsing the central bank's 1%-3% target. "With the gradual improvement of Thailand's tourism industry and current account position, it is only fair that the central bank considers tightening policy rate in the future," Panichpibool said. Equities in the region gained some momentum, with Taiwan's benchmark index climbing 1% to lead gains, followed by Indonesia's, which traded 0.7% higher. Stocks in Malaysia and India also advanced. India's central bank raised the repo rate by 50 basis points (bps), the second hike in as many months, to combat galloping inflation, and said the faster pace of monetary policy normalisation in advanced economies had amplified volatility in financial markets. The rate hike follows a 40-bp unscheduled rise in early May that kicked off the central bank's tightening cycle, which economists expect to be relatively short. "We would expect policy interest rates to rise to a point where by the end of the year, they are at or slightly higher than the inflation rate. We currently have rates peaking at 5.8% in the first quarter of fiscal 2023," ING analysts wrote in a note. Currencies in the region were largely subdued following a dip in the U.S. dollar, although the greenback managed to hit its highest level in 20 years against the Japanese yen. The yen fell 0.6% to lead losses among regional currencies. The rupiah and the South Korean won skidded 0.3% each, while the Philippine peso fell 0.2%. The ringgit and the rupee also fell. Mounting supply constraints and prospects of demand growth from China pushed oil prices higher, thereby weighing on the currencies of the region. Meanwhile, the World Bank slashed its global growth forecast by nearly a third to 2.9% for 2022, warning that Russia's invasion of Ukraine had compounded the damage from the COVID-19 pandemic, and many countries now faced recession. HIGHLIGHTS: ** Japan's Q1 GDP falls less than first thought on stronger consumption - ** China to tackle export bottlenecks in bid to boost trade - ** Indonesian 10-year benchmark yields rise to 7.101% Asia stock indexes and currencies at 0748 GMT COUNTRY FX RIC FX FX INDE STOCKS STOCKS DAILY % YTD % X DAILY YTD % % Japan -0.65 -13.7 <.N2 +1.04 -1.94 7 25> China EC> India -0.07 -4.42 <.NS 0.17 -5.24 EI> Indonesi -0.25 -1.66 <.JK 1.04 9.63 a SE> Malaysia +0.08 -5.15 <.KL 0.05 -2.60 SE> Philippi -0.14 -3.62 <.PS 0.23 -4.96 nes I> S.Korea 11> Singapor -0.05 -1.86 <.ST -0.16 3.45 e I> Taiwan -0.03 -6.21 <.TW 0.95 -8.50 II> Thailand -0.10 -3.09 <.SE 0.28 -1.28 TI> (Reporting by Tejaswi Marthi in Bengaluru; Editing by Subhranshu Sahu)