* Malaysian ringgit hits lowest since January 1998
* China cuts 5-year LPR by 25 basis points
* Thai baht reached 3-1/2-month low

By Himanshi Akhand
       Feb 20 (Reuters) - Malaysia's ringgit reached a 26-year
low as emerging Asian currencies weakened against the dollar on
Tuesday, while the Chinese yuan slid after China cut its
benchmark mortgage rate by more than expected, but found support
from state bank buying.
    The ringgit weakened as much as 0.2% to its lowest
level since January 1998. The South Korean won and
the Taiwanese dollar inched 0.2% and 0.3% lower,
    "Negative rate differentials with the U.S., have translated
into capital outflows and corporate hoarding of USD,
exacerbating the downward pressure on the ringgit," Nicholas
Chia, macro strategist at Standard Chartered, said.  
    Meanwhile, the Chinese yuan was last largely
unchanged at 7.198 per dollar, after touching its lowest level
in three months earlier in the session.
    Sources told Reuters that China's major state-owned banks
were seen selling dollars in an attempt to arrest weakness in
the yuan in the wake of a deep cut to the benchmark mortgage
    China cut the five-year loan prime rate (LPR), the benchmark
reference rate for mortgages, by 25 basis points to 3.95% at a
monthly fixing, as authorities ramped up efforts to stimulate
credit demand and revive the property market. 
        That was a deeper cut than the five to 15-basis point
reduction market watchers polled by Reuters had expected and was
the largest cut since the reference rate was introduced in 2019.
        Shanghai stocks were flat, while those in Seoul
 dropped 1.2%, as investors booked profits after a recent
    Equities in Kuala Lumpur rose 0.5% to their highest
level since early-June 2022, and stocks in Manila rose
    Thailand's stock market, however, fell 0.5% and the
baht weakened as much as 0.6% to its lowest level since
Nov. 1, 2023.
    Data on Monday showed Thailand's economy unexpectedly
contracted in the fourth quarter of 2023. Prime Minister Srettha
Thavisin said the economy was in a critical stage and again
urged the central bank to cut interest rates without waiting for
a scheduled meeting. 
    Srettha, who is also finance minister, has been at
loggerheads with the Bank of Thailand (BOT) over the direction
of monetary policy.
    "Given the very weak economic data yesterday, BOT is under
heavy pressure from various fronts to ease rates and we would
not rule out the risk that they may have to start an easing
cycle with multiple cuts ahead of the Fed," analysts at Maybank
    The Bank of Thailand's next meeting is scheduled for April
    In Indonesia, the rupiah inched 0.2% lower while
stocks were up 0.6% ahead of Bank Indonesia's (BI) rate
decision on Wednesday.
    Economists in a Reuters poll expect BI to keep its key
policy rate unchanged on the back of subdued inflation and an
improving currency outlook and see the first rate cut in the
next quarter.   
    ** Philippines posts $740 million deficit in January  
    ** Thailand plans $1 bln in overseas bonds, official says
    ** Malaysia's Jan exports rise more than expected
  Asia stock indexes and currencies                       
 at 0452 GMT                                        
                      DAILY %  YTD %     X   DAILY   YTD %
 Japan                  -0.15  -6.17  <.N2  -0.32   14.59
 China                               EC>           
 India                  +0.04  +0.27  <.NS   -0.23    1.56
 Indonesi               -0.19  -1.66  <.JK    0.56    0.89
 a                                    SE>           
 Malaysia               -0.10  -4.16  <.KL    0.52    6.32
 Philippi               -0.10  -1.28  <.PS    0.41    5.84
 nes                                  I>            
 S.Korea                             11>           
 Singapor               -0.03  -1.97  <.ST    0.07   -0.37
 e                                    I>            
 Taiwan                 -0.30  -2.39  <.TW    0.46    4.41
 Thailand               -0.36  -5.41  <.SE   -0.48   -2.48

 (Reporting by Himanshi Akhand in Bengaluru; Editing by Sonali