By Saikat Chatterjee
HONG KONG, Jan 22 (Reuters) - Swap rates in New Zealand extended their drop on Friday after a slide in Asian stocks compounded the move from earlier in the week when soft readings on consumer prices cooled investor expectations of central bank rate hikes.
Short-term rates around Asia dropped as investors seized on proposals by U.S. President Barack Obama to clamp down on bank risk taking to drive down stocks, with the MSCI index of Asia-Pacific shares outside Japan tumbling 3 percent at one point.
* New Zealand swap rates fell across the curve, with the one-year rate dropping 7 basis points to a one-month low of 3.580 percent and taking the drop over the past three days to 16 basis points. Bill futures jumped.
* "People are taking risk off the table," said ANZ National markets economist Khoon Goh in Wellington.
* Chinese swaps also declined, reversing some of the jump this week after the People's Bank of China took more steps to head off inflation by clamping down on bank lending.
* One-year onshore swap rate dipped 2 basis points to 2.25 percent. Some market players booked profits by unwinding positions paying fixed rates in swaps, which had been put on after the PBOC action this week.
* But China's moves to tighten liquidity started have some impact on money market rates. The benchmark seven-day repo rate was at 1.4808 percent on a weighted average basis, jumping about 9 basis points on the day.
* In India, the one-year overnight index swap rates hit a one-month low as market players kept unwinding positions on how much the country's central bank will tighten liquidity this year. The Reserve Bank of India is widely expected to follow China's move in raising reserve requirements at a policy review next Friday.
* One-year OIS rates were at 4.86 percent, a third straight weekly drop and well below a two-year peak of 5.1 percent hit in late December.
* The spread between policy rates and five-year OIS rates remain near record wide levels, and for that reason Standard Chartered expects the short-end of the OIS curve to start flattening sharply as the RBI tightens liquidity.
* In Korea, swap rates were set for the third consecutive weekly drop as the KOSPI's slide added to doubts about when the Bank of Korea will start raising rates, especially after it struck a dovish stance at last week's review.
* One-year swap rates dipped 4 basis points to a six-week low of 3.43 percent and are down 26 basis points lower than the start of the year.
* In Singapore, three-month U.S. dollars were quoted at an average 0.2528 percent, edging up from Thursday but slightly above three-month dollar LIBOR's fix of 0.2488 percent. It is slightly above an all-time low of 0.25167 struck earlier this month. (Editing by Jan Dahinten)