Asian currencies down in thin trading<\/p>\n
SINGAPORE (Reuters): Asian currencies were mostly weaker in
\nthin pre-holiday trade yesterday after Moody's Investors Service
\ndowngraded the sovereign debt of four countries -- three of them
\nto junk bond status.<\/p>\n
Moody's said it had downgraded the foreign currency ceiling
\nfor bonds and bank deposits of Indonesia, Malaysia and South
\nKorea in view of Asia's continuing financial woes. It also
\ndowngraded Thailand's foreign currency ceiling for bonds and
\nconfirmed the ceiling for bank deposits.<\/p>\n
News of the downgrades, which would ordinarily have sparked a
\nselling spree in bearish Asian currency markets, caused little
\nmore than a hiccup as most players had closed their books and
\nwere unwilling to commit themselves before the end of the year.<\/p>\n
In South Korea, the won ended at 1,715 to the dollar against
\nFriday's 1,550, depressed by Moody's move and importer demand for
\ndollars in a market short of the U.S. currency.<\/p>\n
Dealers dismissed the Finance Ministry's efforts to liberalize
\nforeign investment in bonds of state and state-run companies and
\nin short-term corporate bonds.<\/p>\n
"Who would buy bonds in a country whose credit ratings have
\nfallen to a junk bond level," said one foreign bank dealer.<\/p>\n
The Taiwan dollar ended at T$32.603 per U.S. dollar against a
\nprevious T$32.374 close due to the U.S. dollar's overall strong
\ntone.<\/p>\n
The Hong Kong dollar and forwards were steady in slow trade.<\/p>\n
Most Southeast Asian currencies looked soft, but dealers said
\nthey expected range trading due to a lack of participation.<\/p>\n
The Indonesian rupiah outshone its regional counterparts,
\nfirming to 5,050\/100 to the dollar at 1050 GMT against early
\nlevels of around 5,200\/5,250 despite the Moody's downgrade.<\/p>\n
The Thai baht slid to 47.00\/20 per dollar onshore against
\n45.90\/46.30 late on Friday on corporate demand for dollars. The
\noffshore rate was at 44.70\/45.20 against 45.05\/45.45.<\/p>\n
News of Moody's downgrades of Thailand's foreign currency
\nceiling for bonds to a junk bond grade had very limited impact as
\nplayers had expected the worst and some companies had already
\nclosed their books for the year.<\/p>\n
The Singapore dollar remained weak at 1.6750\/80 to the U.S.
\ndollar against 1.6710\/40 on Friday. Dealers said there was no
\nsign of the de facto central bank after last week's apparent
\ninterventions, which rescued the currency from six-year lows.<\/p>\n
The ringgit slipped to a low of 3.8680 to the dollar after
\nratings downgrades of Malaysia's sovereign debt and selected
\ncompanies. Dealers said its drop was exaggerated by very poor
\nliquidity.<\/p>\n
The Philippine peso closed at 40.08 to the dollar from
\nFriday's 39.540 close as demand for dollars rose after the
\ncentral bank suspended its intervention.<\/p>\n
The Bankers Association of the Philippines said it would
\ntemporarily stop selling dollars to the central bank, effective
\nTuesday, cutting off supply to a pool of funds meant to stem the
\npeso's slide by providing dollars for companies in need of them.<\/p>\n
Traders said the plan had proved ineffective, partly due to
\nthe heavier than expected demand for dollars.<\/p>",
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