Asian currencies mixed late, rupiah rally loses its steam<\/p>\n
SINGAPORE (Dow Jones): Asian currencies met different fates
\nlate Monday. The Indonesian rupiah posted mild gains on the
\nremoval of General Wiranto from his cabinet post while the Korean
\nwon retreated from its recent highs on central bank verbal
\nintervention and a stock market plunge.<\/p>\n
The rupiah's early rally lost its steam by late Monday as
\nmarket players chose to focus on the protracted and confusing
\nrun-up to President Abdurrahman Wahid's decision to suspend
\nWiranto over his alleged role in last year's bloodshed in East
\nTimor.<\/p>\n
\"What we would have loved to see is a clear unambiguous
\nmessage,\" said Simon Flint, currency strategist with Bank of
\nAmerica. \"It's mildly positive; it could have been so much
\nbetter.\"<\/p>\n
The U.S. dollar is trading at Rp 7,253 late Monday, down from
\nRp 7,300 late Friday, but above its intraday low of Rp 7,235
\nearly Monday.<\/p>\n
For the last two weeks, the rupiah had been held hostage by
\nthe public long-distance row between the two officials, which
\nbegan when Wahid said while on an overseas visit that he would
\nask for the general's resignation upon his return to Indonesia.<\/p>\n
On Sunday, Wahid met with Wiranto and announced that the
\nminister would remain part of the government while the attorney-
\ngeneral's office conducted a new formal inquiry into the violence
\nthat followed East Timor's vote for independence.<\/p>\n
But in a surprise reversal Monday morning, Wahid suspended the
\npowerful security and political affairs minister from his
\ncabinet.<\/p>\n
While the move is significant, reducing the military's once
\npowerful grip on the country and reinforcing Indonesia's
\nfledgling democratic process, analysts said the rupiah could have
\ntraded much higher had Wahid been more decisive and waited to
\ndiscuss the matter until he returned to Indonesia.<\/p>\n
\"The rupiah could have gone to Rp 7,100 (against the U.S.
\ndollar) if there had been more of a clear signal,\" Flint at Bank
\nof America said.<\/p>\n
Although it managed to touch its strongest level since
\nNovember 1997, the South Korean won took a step backward late
\nMonday after the central bank suggested it would intervene to
\nsupport the U.S. dollar.<\/p>\n
The U.S. dollar was quoted at 1,126.0 won late Monday, sharply
\nhigher than 1,115.3 won late Friday.<\/p>\n
Late in the session, an official at the Bank of Korea said the
\ncentral bank is very worried about the speed of the won's
\nappreciation against the dollar and that it's prepared to take
\nsteps to stabilize the won\/dollar exchange rate.<\/p>\n
\"Given the deteriorating trade balance and the inflow of
\nforeign funds into the local stock market, we are very worried
\nabout the rapid rise of the won's value,\" the official said,
\nrequesting anonymity. However, he didn't specify what those
\nmeasures might be.<\/p>\n
The Bank of Korea's verbal intervention follows similar
\nremarks Monday morning by an official at the Ministry of Finance
\nand Economy.<\/p>\n
Meanwhile, after an initial rise, the Thai baht and the
\nSingapore dollar faltered as the rupiah lost its upward momentum.
\nAgainst the baht, the U.S. dollar was quoted at 37.520 baht late
\nMonday, up from 37.475 baht late Friday, but below 37.405 baht
\nearly Monday.<\/p>\n
And versus its Singapore counterpart, the U.S. unit was also
\nquoted at S$1.6934 late Monday, barely changed from S$1.6935 late
\nFriday, and higher than a low of S$1.6910 early Monday.<\/p>\n
Analysts say the Singapore dollar is still hampered by the
\nyen's relative weakness to the U.S. dollar since the currency is
\nmonitored against a trade-weighted index.<\/p>\n
In Manila, the U.S. dollar ended trading at 40.375 pesos,
\nweaker than 40.450 pesos late Friday, while the dollar ended
\ntrading in Taipei at NT$30.646, up from NT$30.613.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/asian-currencies-mixed-late-rupiah-rally-loses-its-steam-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}