Asia currencies stuck on Indonesia, baht shines<\/p>\n
SINGAPORE (Reuters): Asian currencies were mostly steady
\nyesterday as activity wound down ahead of an event-filled weekend
\nin Indonesia.<\/p>\n
Dealers said trade was subdued as the market awaited the
\nformation of Indonesia's new cabinet on Saturday morning, while
\npressure mounted on Jakarta to stick to International Monetary
\nFund reforms.<\/p>\n
A senior IMF team, U.S. Treasury Undersecretary of
\nInternational Affairs David Lipton, Japanese Prime Minister
\nRyutaro Hashimoto and senior Finance Ministry official Eisuke
\nSakakibara are all expected in Jakarta by the weekend.<\/p>\n
IMF Managing Director Michel Camdessus said in Washington he
\nhoped the fund could soon release the second $3 billion tranche
\nof its loan package to Indonesia.<\/p>\n
The IMF announced last week it was delaying the disbursement
\nuntil the economic and political situation in Indonesia became
\nclearer.<\/p>\n
Camdessus also said the IMF was still opposed to the idea of
\nIndonesia implementing a currency board at present, given its low
\nlevel of reserves, the vulnerability of the banking system and
\nlarge corporate debt.<\/p>\n
He said Indonesia had to reform its economy and banking system
\nbefore attempting to introduce a currency board.<\/p>\n
The Indonesian rupiah was stagnant as traders kept away on
\ncontinuing speculation that Jakarta might announce a currency
\nboard or some other system to stabilize the rupiah after the new
\ncabinet appointments.<\/p>\n
\"People just find dollar\/rupiah too risky at the moment. And
\nthere are also a lot of dollar bids out of Hong Kong at the
\n10,400\/500 levels,\" a U.S. bank dealer in Singapore said.<\/p>\n
She added that funds were reducing their long dollar positions
\nagainst the Malaysian ringgit and Singapore dollar due to
\nuncertainty about the possible introduction of a currency board.<\/p>\n
\"When we get to the weekend, there's always talk of a currency
\nboard being introduced so there's been some squaring out of long
\ndollar positions against the ringgit and Sing dollar,\" she said.<\/p>\n
\"But if there's no currency board on Monday, everyone will buy
\ndollars again,\" she added.<\/p>\n
Some dealers said much of the uncertainty hanging over
\nIndonesia, and depressing Asian markets, was likely to be cleared
\nup after the weekend and the U.S. dollar could therefore come
\nunder intense pressure next week.<\/p>\n
Elsewhere, the Thai baht gained more than four percent
\nfollowing stop-loss dollar sales at the 43.00 level, which had
\nposed a stubborn barrier in recent sessions.<\/p>\n
Dealers said sentiment towards Thailand had continued to
\nimprove and the market was beginning to hope for a credit ratings
\nupgrade.<\/p>\n
Prime Minister Chuan Leekpai, on a visit to the United States,
\nsaid the Thai economy had turned the corner, and the reforms
\nwhich Bangkok introduced should see it through the financial
\ncrisis.<\/p>\n
\"There are positive developments out of the U.S. so funds are
\nturning back to long baht positions and going short the ringgit
\nand Sing,\" a senior regional currencies dealer in Singapore said.<\/p>\n
He said the baht was becoming the favored currency in Asia,
\nand there were even signs players were going long baht\/yen due to
\nJapan's widening bribery scandal.<\/p>\n
In north Asia, the South Korean won rose on stop-loss dollar
\nsales as the central bank continued to sell dollars to settle its
\nforward transactions and there was limited demand from importers.<\/p>\n
Seoul traders said it bounced back from a day low of 1,554 to
\nthe dollar, reached on news North Korea had announced a state of
\n\"wartime mobilization\".<\/p>\n
But Seoul's defense ministry said North Korea seemed to be in
\nan annual military exercise.<\/p>\n
The Finance Ministry said international creditors had agreed
\nto roll over $21.37 billion of South Korea's short-term debts.<\/p>\n
It also said usable foreign reserves rose to $20.22 billion as
\nof March 12, from $8.87 billion at the end of 1997, due to
\ninflows from the IMF's bailout package and growing debt
\nrollovers.<\/p>\n
The Taiwan dollar gave way to importer demand for dollars in
\nlate trade.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/asia-currencies-stuck-on-indonesia-baht-shines-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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