BENGALURU: The Philippine peso slipped and equities were steady on Thursday after the country’s central bank cut its benchmark interest rate for the first time in nearly four years, while other emerging Asia currencies traded in narrow range.

The Philippine peso fell as much as 0.3% against the dollar and was down 0.2% at 0748 GMT after the Bangko Sentral ng Pilipinas (BSP) cut its benchmark rate by 25 basis points to 6.25% for the first time since November 2020.

Stocks in the region were down 0.2%.

The explanation behind BSP’s move was the softness in consumption growth even as inflation remains around 3% with some retracement, said Saktiandi Supaat, head of Asia forex research at Maybank.

“But we don’t expect to see sharp peso weakness before the Fed’s move this year,” Supaat added.

Data last week showed that while Philippine’s economy expanded slightly faster than expected in the second quarter, consumer spending declined 0.1% quarter-on-quarter.

The Thai baht reversed course to trade 0.2% higher, while stocks in Bangkok fell 0.7%. Thai stocks are down 9.4% so far this year - the worst performing Asian stock market.

The dismissal of Thailand’s incumbent prime minister has sparked fears of political instability in the Southeast Asian country.

“The removal, after less than a year in office, throws Thailand into further political uncertainty, which we expect to negatively impact investor sentiment,” DBS analysts wrote in a note.

Meanwhile, global markets scrutinised the US inflation reading which showed consumer prices grew moderately in July, firming expectations the Federal Reserve will cut interest rates soon.

In Asia, the Indonesian rupiah slipped 0.1% while Jakarta stocks fell 0.5%.

The Chinese yuan shed 0.2% while Shanghai stocks gained around 1%.

China’s factory output growth in July missed expectations adding to concerns the recovery in the world’s second-largest economy remains fragile.

The country’s central bank also injected $81 billion cash through a short-term bond instrument.