Emerging markets: Philippine peso hits highest level since March 1 as Thailand stocks edge higher on Monday (April 4)

MANILA, April 4 (Reuters): The Philippine peso rose to a five-week high on Monday, buoyed by improved manufacturing data and the central bank's recent hawkish tone on gradually normalising liquidity pressures, while the Malaysian ringgit led losses among emerging Asia currencies.

The peso advanced 0.3%, hitting its highest since March 1, while the Malaysian ringgit eased 0.3% despite a rise in oil prices, as investors kept a watchful eye on the International Energy Agency's plan to follow the United States in releasing oil reserves.

Bangko Sentral ng Pilipinas (BSP) in a meeting late last month left key interest rates unchanged, but highlighted its readiness to temper increased pricing pressures as it raised inflation forecasts.

The currency has gained 1.8% since the announcement. Meanwhile, the Philippine purchasing managers' index reached a reading of 53.2 in March compared with 52.8 in February.

"(The) peso manages to steady further with proceeds from a recent U.S. dollar bond issuance helping support the currency," said Nicholas Mapa, a senior economist at ING.

"Also, helping the peso strengthen are expectations for a faster inflation report tomorrow, which could prompt the central bank to hike policy rates sooner rather than later."

Oil prices, which slipped 13% last week, edged higher as worries over tight supplies persisted after Germany warned of more sanctions on Russia and talks to revive the Iran nuclear deal paused.

In other news, investors expect US Federal Reserve officials to strike hawkish tones at public events this week after Friday's March payrolls report that showed the unemployment rate fell to a new two-year low.

"We anticipate the Fed to hike interest rates by 50 basis points in the next few policy meetings before reducing the pace," said Chang Wei Liang, a macro strategist (FX and credit) at DBS Bank.

The yield on Indonesia's 10-year bonds, among the highest in the region, was almost unchanged at 6.745%, while yields on India's benchmark bonds rose 6.7 basis points to 6.910%.

Singapore's central bank is likely to tighten policy at its review this month, the third time in a row, as inflationary pressures intensify due to global supply-side disruptions and an easing of the city-state's border controls.

Other central banks in the Philippines, Thailand and Indonesia had left interest rates unchanged last month. Among stocks markets in the region, the Philippines was down 0.2%, while Thailand and South Korea edged higher.

Meanwhile, Sri Lanka's Colombo Stock Exchange, which fell more than 20% in one week, suspended trading twice due to a sharp fall in the share price index as the country grapples with the greatest economic crisis in decades.

Markets in China and Taiwan were closed for a holiday. - Reuters