Updates for afternoon trade

By John Biju

Dec 17 (Reuters) - Thai stocks clawed back gains on Wednesday after Thailand's central bank delivered a widely expected rate cut, while the Indonesian rupiah recovered from a three-week low following its third consecutive policy hold.

Thailand's benchmark index .SETI was 0.2% higher at 1,263.14 points after trading lower for much of the day, while the baht THB=TH declined slightly to 31.505 per U.S. dollar.

The Bank of Thailand cut its key interest rate by 25 basis points to 1.25% to support an economy struggling with multiple challenges, including a strong baht.

The baht is one of the top-performing emerging market currencies globally, having strengthened around 9% this year, which spells trouble for the export and tourism-reliant economy.

MUFG's senior currency analyst, Lloyd Chan, anticipates one more rate cut in the first quarter of next year, adding that "softer growth and election risks ahead of the 8 February 2026 general election could cap baht upside".

In Indonesia, Southeast Asia's top economy, the central bank focussed on the local currency's stability while holding its policy rate.

The rupiah IDR= bounced back from a three-week low to trade slightly higher at 16,680 per dollar. The benchmark equities gauge .JKSE slipped 0.2% after the decision.

"For now, Bank Indonesia's focus appears to be on strengthening the monetary transmission mechanism, rather than cutting rates further, in order to support the economy," Jason Tuvey, deputy chief emerging markets economist at Capital Economics wrote.

"Given the central bank's focus on supporting the economy, we think it will lean towards restarting its easing cycle next year."

Broadly, equities in emerging Asia ticked higher on the day, led by South Korea's KOSPI index .KS11, which jumped 1.5% to mark its best intraday gain in nearly two weeks.

Taiwan's stocks .TWII also rose as much as 1% but gave up those gains to finish largely flat. Traders now await its central bank's monetary policy decision on Thursday. Economists surveyed by Reuters expect no policy change.

Taiwan's dollar TWD=TP slipped 0.3% to 31.580 per U.S. dollar, its weakest point since early May.

Currencies in emerging Asia were also on the back foot against the dollar, with South Korea's won KRW=KFTC slipping to its weakest point since early April.

The Indian rupee INR= rallied to an intraday high of 89.875 a dollar after the central bank intervened aggressively in currency markets.

Overnight, the Argentine peso ARS=RASL fell 1% after the country's central bank unveiled a new monetary framework tying the currency's trading band to inflation in a bid to build reserves and stabilise the economy.

HIGHLIGHTS:

** South Korea says BOK resumed currency swap transaction with NPS

** Japan's exports expand for third straight month, U.S. shipments rebound

** Thailand foreign tourist arrivals down 7.19% y/y so far this year

** Singapore MAS survey shows economists raising 2025 growth forecast

** Singapore's November exports rise 11.6% y/y, stronger than expected

(Reporting by John Biju in Bengaluru; Editing by Subhranshu Sahu and Harikrishnan Nair)

((John.Biju@thomsonreuters.com;))