BENGALURU Stocks in Jakarta hit a record high for a third straight session on Wednesday as investors bet that Indonesia's steady economic growth will prompt the country's central bank to hold rates later in the day.

The benchmark index gained 0.5% while the rupiah was marginally lower against a steady dollar.

In Thailand, where the central bank too is expected to hold rates on Wednesday, stocks also added 0.5%. The baht hit its highest since late July 2023 earlier in the session, rising as much as 0.3% but was last trading flat.

Reuters polls show policymakers in Indonesia and Thailand, Southeast Asia's two largest economies, are expected to stand pat amid improving economic prospects and expectations that the US Federal Reserve (Fed) will soon ease.

Bank Indonesia Governor Perry Warjiyo has repeatedly signalled a rate cut bias but this month said external risks such rising US Treasury yields could reverse the course of foreign capital flows and put pressure on the rupiah.

Investor concerns that President-elect Prabowo Subianto’s could spend too much with his fiscal policies have also added  to the view that the central bank is more likely to hold off on  rate cuts for the time being.

Indonesia's second-quarter GDP expanded 5.05% annually after 5.11% growth in the first quarter. The government's 2025 GDP target of 5.2% is also achievable, Maybank analysts said.

"This should alleviate market concerns of aggressive fiscal policy by the new incoming government," they said.

They added that regional central banks "could be cautious about outsized currency weakness that could set in if they cut ahead of the Fed."

Among other emerging Asia currencies, the Philippine peso rose as much as 0.3% to hit its highest since mid-April while the Taiwan dollar gained 0.2%.

The Malaysian ringgit and Singapore dollar each fell 0.1%.

Other regional stock markets were mostly lower with benchmarks in the Philippines and Taiwan dropping 0.3% and 0.8% respectively.

  - Reuters