Asia currencies drag their feet as yen steps up<\/p>\n
SINGAPORE (Reuters): Asian currencies dragged their feet
\nyesterday as the benefits of a strong yen were tempered by demand
\nfor cheaper dollars.<\/p>\n
News of a long-delayed Malaysian bank merger and Indonesia's
\napparent commitment to its IMF reform agreement kept regional
\ncurrencies well underpinned, but dealers said the dollar
\ncontinued to be sought on dips.<\/p>\n
The Asian Development Bank's (ADB) annual report was largely
\nignored by the sleepy market.<\/p>\n
The ADB said Asia's battered economies would start to recover
\nnext year, but would take several years to return to pre-crisis
\ngrowth rates.<\/p>\n
The ADB said Indonesia, Thailand and South Korea would see
\ntheir economies shrink this year while Malaysia and the
\nPhilippines would grow at a much slower rate.<\/p>\n
In Malaysia, the ringgit pulled off its lows as the stock
\nmarket gained from overnight news of a deal between RHB Bank and
\nSime Bank.<\/p>\n
Rashid Hussain Bhd said it would pay 368 million ringgit for
\nSime Bank's net tangible assets.<\/p>\n
Deputy Prime Minister Anwar Ibrahim said he was happy with the
\nfinalization of the deal, which had appeared on the verge of
\nfalling through before Wednesday's announcement.<\/p>\n
The Indonesian rupiah clambered back above the 8,000 per
\ndollar level on commercial dollar sales near its lows of 8,200.<\/p>\n
Dealers said increased offshore placements in central bank
\npaper (SBIs) had lifted the rupiah and short-end swap rates.<\/p>\n
In Jakarta, the rupiah closed at 7,925 against the American
\ngreenback yesterday after it touched a day low of 8,200.<\/p>\n
Local dealers attributed the failure of the rupiah to
\nstrengthen to persistent demonstrations by university students
\ndemanding President Soeharto make rapid economic and political
\nchanges or step down.<\/p>\n
\"Investors are greatly worried that student demonstrations
\nwill spread to the streets in the coming days causing activities
\nto halt,\" the dealer said.<\/p>\n
In Thailand, the baht hovered around the 39.00 per dollar
\nlevel for most of the day, sandwiched between corporate dollar
\ndemand and offshore offers.<\/p>\n
In Hong Kong, a government financial review said the local
\ndollar's peg must be maintained and interest rates remained the
\nmost potent weapon for defending it, despite the hardship
\ninflicted on residents.<\/p>\n
The Hong Kong dollar was steady while forwards remained soft
\non low short-term rates and the yen's strength.<\/p>\n
The Singapore dollar slipped from its highs but held up after
\nbreaching the 1.5850 barrier on stop-loss U.S. dollar sales.<\/p>\n
The Philippine peso slipped on dollar buying in the parallel
\nforeign exchange market.<\/p>\n
Dealers said foreign funds were shifting their portfolios out
\nof Philippine markets ahead of the May 11 presidential election,
\nwhich Vice President Joseph Estrada is tipped to win.<\/p>\n
The South Korean won gained from the yen's rise, which spurred
\nbanks to square long dollar positions though concerns about
\npossible labor unrest lurked in the background after a militant
\nunion threatened to boycott talks with the government and
\nbusiness.<\/p>\n
The Taiwan dollar rose with the yen and on investor wariness
\nthe central bank might defend it in the face of pressure from
\nrecent data showing a falling exports trend.<\/p>\n
In London, the dollar rose against the yen after Tokyo cooled
\nspeculation of intervention to support the currency and London
\nstocks recovered from a lackluster start after soothing UK retail
\nsales data.<\/p>\n
The dollar recovered early in Europe to 130.45 yen from an
\nearlier low of 129.91 but it was still marginally below
\nWednesday's late European trading level.<\/p>",
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