SINGAPORE: Malaysia's ringgit was set for its biggest intraday drop since July in holiday-thinned trading on Monday and led losses among regional currencies as the U.S. dollar held firm at the start of a week set to be dominated by central bank reports.

       Regional stock markets fell sharply, taking cues from broader Asian equities, as shares in Kuala Lumpur hit a near one-month low, while those in Indonesia and the Philippines shed more than 1% each.

       The dollar gained while investors awaited further signals from the Federal Reserve on stimulus tapering, and escalating woes at indebted developer China Evergrande sapped risk appetite and led traders towards the safe-haven greenback.

       Concerns around Evergrande's ability to meet its imminent payment obligations have cast a shadow over Asian markets in recent weeks as it poses broader risks to China's financial system.

       The ringgit shed roughly 0.4%. Former Malaysian prime minister Datuk Seri Najib Razak, who was convicted of corruption, told Reuters on Sunday that he had not ruled out seeking re-election to parliament, raising the potential for more political instability to come.

       Malaysia's traditional ruling party, the United Malays National Organisation, returned to power last month, after coalition infighting unseated prime minister Tan Sri Muhyiddin Yassin and UMNO's Datuk Seri Ismail Sabri Yaakob was appointed in his place. Led by Najib, UMNO was defeated in the last election in 2018,

       Indonesia's rupiah gave up 0.2%. The country's central bank is expected to keep its key interest rate steady on Tuesday as the economy gradually reopens after a recent devastating COVID-19 wave.

       "Bank Indonesia should maintain the policy rate and assure markets that it remains focused on financial stability, helping contain any pressure on IDR risk premia," analysts at Barclays said in a note. In the Philippines, the peso lost 0.2%, ahead of a Bangko Sentral ng Pilipinas (BSP) meeting this week.

       "The PHP can come under some pressure as the BSP leaves rates unchanged, focusing on supporting growth while raising 2021 inflation forecasts further above its target range," Barclays analysts added.

       BSP last week sharply cut its current account surplus projection for this year and forecast a deficit next year, citing risks from the emergence of highly transmissible COVID-19 variants.

       Thai stocks tumbled 0.6% and the baht hit its lowest level since Aug. 23, as some drag from last week's report of a delay to reopening the capital Bangkok to tourists remained. - Reuters