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EMERGING MARKETS-Asian currencies dip after Fed, Bank Indonesia in focus

    * Graphic: World FX rates tmsnrt.rs/2egbfVh
    * Graphic: Foreign flows into Asian stocks tmsnrt.rs/3lKhL5I
    * Fed view supports U.S. dollar, hits EM pairs
    * Bank Indonesia monetary policy meeting in focus
    * Taiwan dollar up for sixth straight day

    By Shashwat Awasthi
    Sept 17 (Reuters) - Most emerging Asian currencies fell on Thursday against the U.S. dollar,
which firmed after the U.S. Federal Reserve upgraded its 2020 GDP outlook, while the Indonesian
rupiah rose for the third straight session on expectations the central bank would keep interest
rates steady.
    Regional share markets followed Wall Street lower, with Singapore, Malaysia
and Philippines all down on the day. U.S. stocks rose after the Fed vowed to keep
interest rates near zero until inflation is on track to overshoot its 2% target, but investors
later took profit.
    The Fed announced a policy shift allowing for greater tolerance towards inflation last
month, and some analysts said the dovish Fed comments had already been priced in to some extent.
    "Dovish commitment was reaffirmed but no further active approach was taken to demonstrate
its dovish commitment to meet inflation objectives," Maybank analysts said in a note.
    The greenback, which has been under pressure since the Fed announced the policy shift,
advanced as the U.S. central bank predicted the world's largest economy would shrink 3.7% in
2020, far less than the 6.5% contraction previously forecast.
    The Thai baht, Philippine peso and Malaysian ringgit were among the
biggest fallers in the region.
    The Bank of Japan also kept its monetary policy steady on Thursday and slightly upgraded its
view on the economy.
    Investors will also watch Bank Indonesia's (BI) monetary policy meeting this session, where
the central bank will have to balance the need to support a sluggish economy with concerns that
a rate cut could put additional pressure on a downbeat rupiah. The central bank is expected to
keep rates on hold.
    Jakarta stocks, which slid more than 2% over the last two days, seesawed in early
trading before settling marginally lower.
    The BI has been in focus after a panel of internal experts advised the government to
increase its involvement in the central bank's monetary policy framework. Investors are
concerned this could compromise central bank independence at a time when BI is underwriting
government debt issues under coronavirus emergency measures.
    Ratings agency S&P Global said in a report on Wednesday that central banks in emerging
markets could risk their reputations, sovereign credit ratings and even full-blown economic
crises if they continue to monetise government debt after the crisis.
    "While the government has expressed that it is not in agreement with some proposed changes,
it remains too early to judge how the law will pan out and investors are likely to remain
cautious for some time," said Wei Liang Chang, a macro strategist at Singaporean bank DBS.
    Singapore's FTSE Strait Times Index climbed as much as 0.5% after
higher-than-expected August exports, before reversing course to join its peers in the red by
0330 GMT.
    "Contrary to expectations of the global pandemic hitting regional exports hard, Singapore's
have held the ground well so far this year," analysts at Dutch bank ING wrote.
    "This data should bring more comfort to the central bank to keep the neutral policy stance
at the upcoming semi-annual policy review in October."
        
    HIGHLIGHTS
    
    ** Indonesian 10-year benchmark yields are up 3.1 basis points at 6.946%
    ** In the Philippines, top index losers are Metro Pacific Investments down 2.84%,
JG Summit Holdings down 2.38% and Megaworld down 2.23%
    
    
   Asia stock indexes and currencies at 0354 GMT                                   
   COUNTRY      FX RIC    FX DAILY %    FX YTD %     INDEX   STOCKS DAILY %  STOCKS YTD %
    Japan                   -0.09        +3.41                   -0.72          -1.48
    China                   -0.32        +2.74                   -0.99           6.60
    India                   +0.00        -2.91                   -0.56          -5.17
  Indonesia                 +0.17        -6.22                   -0.08          -19.77
  Malaysia                  -0.39        -1.33                   -0.82          -4.41
 Philippines                -0.19        +4.50                   -0.98          -24.65
   S.Korea                  -0.08        -1.75                   -1.22           9.49
  Singapore                 -0.26        -1.29                   -0.08          -22.33
   Taiwan                   +0.60        +3.34                   -0.91           7.18
  Thailand                  -0.45        -4.26                   -0.17          -18.27
 
 (Reporting by Shashwat Awasthi and Anushka Trivedi in Bengaluru; Editing by Patrick Graham)
  
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