Asian currencies depressed, intervention supports rupiah<\/p>\n
SINGAPORE (Reuters): Depressed Asian currency markets largely
\nignored Indonesia's revised, IMF-endorsed 1998\/99 budget, driving
\nthe rupiah to seek refuge in the arms of the central bank.<\/p>\n
Dealers said the budget, which included a forecast of zero
\neconomic growth, inflation at 20 percent and a rupiah rate of
\n5,000 to the U.S. dollar, contained no surprises and left the
\nmarket anxious about the unresolved issue of corporate debt.<\/p>\n
"The market is not focusing so much on the budget revisions.
\nIt's just a theoretical exercise. What they want to see is how
\nthe government is going to cope with the debt restructuring,"
\nsaid the head of regional currencies trading at a European bank
\nin Singapore.<\/p>\n
Dealers said intervention by Bank Indonesia in a very thin
\nmarket, characterized by spreads as wide as 1,000 rupiah, was
\npractically the only thing keeping the rupiah out of the depths.<\/p>\n
The Indonesian central bank was believed to have sold dollars
\nfor rupiah at the 14,000 level and its repeated rate checking in
\nSingapore and Jakarta kept traders on their toes.<\/p>\n
"The demand for dollars from Jakarta is still very strong."
\nBanque Paribas said emergency Indonesian action to deal with the
\ncountry's private sector debt crisis might be on the cards.<\/p>\n
"What this implies for the currency market is that liquidity
\nwill likely dry up as the currency overshoots to unbelievable
\nlevels, and wide spreads could see offers reach 20,000," it said
\nin a daily commentary.<\/p>\n
Indonesia's troubles continued to weigh on other Asian
\nmarkets, but the effect was more muted as activity wound down
\nahead of next week's holidays for the Lunar New Year and Islam's
\nEid al-Fitr.<\/p>\n
Dealers began to view the rupiah more as an isolated disaster.
\nThe Philippine peso, an island of relative calm in recent
\nsessions, succumbed to mounting pressure from the region and fell
\nfar enough to trigger a market rule that effectively suspends
\ntrading for the day.<\/p>\n
Manila traders said no central bank presence was detected and
\neven foreign banks, which were actively selling dollars recently,
\nhad stopped doing so.<\/p>\n
The Malaysian ringgit was weak at 4.5100 to the U.S. dollar,
\nagainst 4.5325 late Thursday, but activity was confined to a
\nsubdued range with dollar bids around 4.45\/50.<\/p>\n
The Singapore dollar slipped to 1.7635 to the U.S. dollar,
\nagainst Thursday's 1.7500, but dealers said it looked well
\nsupported around 1.7700 for the time being.<\/p>\n
"There's ringgit\/Sing selling from the 0.3900 level and also
\nflight-to-quality buying (of the Singapore dollar) from
\nIndonesia," a dealer said.<\/p>\n
The Thai baht dipped to 54.65 to the dollar onshore from 54.45
\non Thursday as the market awaited details of talks between Thai
\nFinance Minister Tarrin Nimmanahaeminda and the IMF on a review
\nof Bangkok's bailout package.<\/p>\n
In north Asia, the Seoul won outshone its regional
\ncounterparts, firming to 1,745 per dollar versus Thursday's 1,760
\nclose on strong cash demand ahead of the Lunar new year
\nfestivities.<\/p>\n
But dealers said its rise would be blocked by dollar demand
\nfrom importers and banks with month-end debt servicing needs.<\/p>\n
The Taiwan dollar sagged below the T$34.00 level from
\nThursday's 33.706 close as worries about the region triggered
\ndollar demand from importers ahead of the new year break.<\/p>\n
The Hong Kong dollar slipped to HK$7.7430 from a previous
\n7.7385 close as local interest rates eased.<\/p>\n
The Australian dollar held above a support level of US$0.6560
\nbut failed to make much headway due to fears about the rupiah.<\/p>\n
The Indian rupee firmed to 38.65 per dollar as the impact of
\nthe central bank's measures to tighten liquidity overshadowed the
\npotential contagion effect of other Asian currencies.<\/p>\n
The following table shows the drop in value of Asian
\ncurrencies since the crisis began in July. Currency movements are
\nin percentage terms and reflect the local unit's fall against the
\ndollar, not the dollar's rise.<\/p>\n
Currency Current value Move since July 1<\/p>\n
--------------------------------------------------------<\/p>\n
Indonesian rupiah 13,000.00 -81.29%<\/p>\n
Thai baht 54.75 -52.69%<\/p>\n
Korean won 1,744.00 -49.08%<\/p>\n
Malaysian ringgit 4.52 -44.25%<\/p>\n
Philippine peso 43.80 -39.50%<\/p>\n
Singapore dollar 1.76 -18.80%<\/p>\n
Taiwan dollar 33.93 -18.20%<\/p>\n
Indian rupee 38.64 -7.31%<\/p>\n
Hong Kong dollar 7.74 0.01%<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/asian-currencies-depressed-intervention-supports-rupiah-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }