Asian currencies down as rupiah slides<\/p>\n
SINGAPORE (Dow Jones): As speculation of Indonesian capital
\ncontrols fizzled out, a new political scandal in Indonesia
\nthreatened to erupt, knocking the wind out of the rupiah's sails
\nlate Tuesday.<\/p>\n
The rupiah's slide - which represents a reversal from its
\nrecent fortunes - damped other regional currencies.<\/p>\n
The Indonesian attorney general's office declared Tuesday that
\nBank Indonesia Governor Sjahril Sabirin's status has changed from
\nthat of a witness to a suspect in the Bank Bali scandal probe.
\nThe investigation centers around the transfer of funds last year
\nout of Bank Bali to a company closely linked to the then-ruling
\nGolkar Party.<\/p>\n
Pressure for the central bank governor's resignation mounted,
\nwith the parliament even suggesting that Anwar Nasution, senior
\ndeputy governor, take over Sjahril's duties temporarily until a
\nnew governor is appointed. Sjahril, however, appears to be
\nresisting calls for him to step down.<\/p>\n
\"The episode is seen by the market as a political maneuver to
\nget rid of Sabirin,\" WestLB Research economist Syetarn Hansakul
\nsaid.<\/p>\n
Market rumors of a fallout between President Abdurrahman Wahid
\nand Sabirin have recently been swirling in the market.<\/p>\n
The rupiah fell as market participants showed their
\ndisapproval over the government's interference in the central
\nbank's affairs and amid intensified concerns over mounting
\ncorruption allegations in the country.<\/p>\n
\"These are just some of the reasons why international
\ninvestors are going to stay out of Indonesia,\" a dealer at a
\nEuropean bank said.<\/p>\n
At 0830 GMT, the dollar rose to Rp 8,585 from Rp 8,475 late
\nMonday.<\/p>\n
The dollar faced resistance around Rp 8,600. If the dollar
\nbreaks Rp 8,600, it is set to face stiff resistance around Rp
\n8,750 in the short term, dealers said.<\/p>\n
Speculation late last week that Indonesia might impose capital
\ncontrols led to a rally in the rupiah. But such speculation was
\nquashed when the idea of capital controls was shot down by the
\nInternational Monetary Fund and the Indonesian president Monday.<\/p>\n
Against the Singapore unit, the U.S. dollar rose above
\npsychological resistance of S$1.7200 to S$1.7227 around 0910 GMT,
\nup from S$1.7195 late Monday.<\/p>\n
A dealer said investors were bailing out of their Singapore
\ndollar positions in favor of other Group of Seven currencies and
\nthe euro.<\/p>\n
Dollar buying by Thai importers when the U.S. currency
\nbreached resistance at 38.80 baht worsened the baht's losses,
\ndealers said.<\/p>\n
The dollar ended up at 38.895 baht late in Asian dealings,
\ncompared with 38.835 baht late Monday.<\/p>\n
In Manila, banks and corporates covered short dollar
\npositions, dragging the peso down to 42.375 pesos per dollar from
\n42.320 pesos at Monday's close.<\/p>\n
Although rumors earlier in the day that one of the 21 hostages
\nheld by Muslim rebels had been killed proved to be false, the
\npeso failed to regain its strength and fell as low as 42.40 pesos
\nto the dollar.<\/p>\n
Looking ahead, market participants will be awaiting the
\nrelease of Japan's first-quarter gross domestic product data on
\nFriday. If the data turn out better than market forecasts, that
\nwould strengthen the yen against the dollar and, in turn, provide
\na boost for Asian currency markets, analysts said.<\/p>\n
Taiwan, Hong Kong and South Korean markets were closed Tuesday
\nfor national holidays.<\/p>",
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