THE Thai baht slumped on Monday and was staring at its biggest fall in 23 years, as most stock markets and currencies in Asia declined after strong U.S. jobs data raised concerns that the Federal Reserve could keep interest rates higher for longer.

The baht weakened 1.6% against the U.S. dollar to 33.525 and was on track for its worst session since September 1999, while equities in Bangkok fell 0.2%.

"Amongst AxJ (Asia ex-Japan), the baht is one that appears to be most stretched in terms of positioning and magnitude of move... hence, sharp unwinding of the U.S. dollar short appears most felt in the baht," said Christopher Wong, a currency strategist at OCBC.

"In the near term, the baht could move sideways with bearish bias since the market is concerned about the Fed's rate-hike path," said Poon Panichpibool, a market strategist at Krung Thai Bank.

Thailand's headline consumer price index rose 5.02% in January from a year earlier, the slowest pace in nine months and below analyst forecasts, data showed.

However, the pace remained well above the Bank of Thailand's target range of 1% to 3%, suggesting the central bank will raise its key interest rate further. It will next review policy on March 29.

Indonesia's rupiah declined 1.1%, while shares in Jakarta shed 0.5% after three straight session of gains.

Growth in Southeast Asia's largest economy climbed to its strongest in nine years last year, fuelled by revived spending from the lifting of pandemic restrictions and as a global commodity boom sent exports to a record high.

Official data showed the economy expanded 5.31% in 2022, its best since 2013, and faster than the 5.29% expected in a Reuters poll.

Among other regional currencies, the Philippine peso fell 1.3% and South Korea's won weakened 1.7%.

The Indian rupee fell 0.8%, while Singapore's dollar eased 0.1%.

On Friday, the U.S. Labor Department's closely watched employment report showed nonfarm payrolls surged by 517,000 last month.

Economists in a Reuters poll had expected a gain of 185,000.

The data, which came on the heels of what were seen as largely dovish messages from the Fed and some other central banks earlier in the week, spurred concerns about interest rates staying elevated, boosting the dollar and pushing bond prices lower.

"The U.S. jobs data supports the Fed's hawkish tone and the U.S. dollar including its soft landing theory. At the same time, it forces Asian currencies to post some correction after the quick moves," said Kittika Boonsrang, capital markets business research specialist at Kasikornbank.

The dollar index touched a near 4-week high of 103.22 and was last at 103.08. In India, an extended sell-off in Adani Group stocks pressured equities, dragging the Nifty 50 index down 0.8%.

The Reserve Bank of India is expected to raise its main interest rate by a modest 25 basis points to 6.50% on Wednesday, before leaving it at that level for the rest of the year.

Stocks in Manila slumped 1.8%, while Singapore shares were trading flat. 

 - Reuters