HONG KONG (Bloomberg) -- Asian currencies rose, with Malaysia's ringgit reaching the strongest since November 1997, on speculation overseas investors will buy the region's equities.

The currency added to two weeks of gains as the Kuala Lumpur Composite Index of shares climbed to a record. Asian stocks advanced on optimism U.S. President George W. Bush will announce a stimulus package to revive growth in the world's biggest economy.
“We are still seeing inflows into the stock market, so people will continue to buy some non-dollar currencies,” said Nor Alfian Din, head of the Asian currency unit in Kuala Lumpur at Malayan Banking Bhd., Malaysia's biggest lender.
The ringgit rose 0.3 percent to 3.2720 per U.S. dollar as of 4:06 p.m. in Kuala Lumpur, versus 3.2815 late Monday, according to data compiled by Bloomberg. The currency has gained 1 percent this year, the second-best performer in Southeast Asia after the Thai baht.
The Kuala Lumpur Composite Index of stocks advanced 2.8 percent. Malaysia's economy expanded 6.7 percent in the third quarter from a year earlier, the fastest pace in three years. The government has forecast fourth-quarter growth to match that and predicted the economy grew around 6 percent in 2007.
The South Korean won added 0.1 percent to close at 939.30, the Singapore dollar gained 0.2 percent to S$1.4323 and the Thai baht advanced 0.2 percent to 33.29 in onshore trading. The MSCI Asia Pacific Index of shares added 0.1 percent, following a three-day, 3.4 percent drop.
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The Philippine peso rose to its strongest in seven years against the dollar after the government said inflation last year was below target. The currency gained 0.6 percent to 40.75 per dollar in Manila, according to Tullett Prebon Plc. The peso was the best performer amongst the 10 most-active currencies outside Japan Tuesday.
“The domestic factors are very positive, driving the peso higher and further strengthening investors' confidence,” said Fitz Aclan, who helps manage the equivalent of $5.9 billion at BDO Unibank in Manila.
Low inflation is supporting the fastest economic expansion in at least three decades, helping the peso gain almost 19 percent last year, the best performing Asian currency. Consumer prices rose 2.8 percent in 2007 from a year earlier, below the central bank's target range of 4 percent to 5 percent, the National Statistics Office said in Manila Tuesday.
Indonesia's rupiah was little changed, holding near the weakest in more than four months, after the central bank kept its benchmark interest rate unchanged. The currency traded at 9,454 per dollar in Jakarta versus 9,455 Monday, according to data compiled by Bloomberg.
Bank Indonesia kept its reference rate for bill sales at 8 percent, as expected by economists in a Bloomberg survey.
Elsewhere, the Vietnamese dong gained 0.1 percent to 15,993 and the Taiwanese dollar was little changed at NT$32.457.