Asian currencies mixed, rupiah slightly lower<\/p>\n
SINGAPORE (Dow Jones): The Japanese yen's overnight gains
\nbuoyed several Asian currencies late Friday, although market
\nparticipants were largely noncommittal amid anxieties over what
\nmoves monetary authorities in Thailand and Singapore would make,
\ndealers said.<\/p>\n
The Singapore dollar, the South Korean won and the New Taiwan
\ndollar were stronger, while the Thai baht, the Indonesian rupiah
\nand the Philippine peso were slightly weaker.<\/p>\n
The Thai baht slipped as waning fears of rigid foreign
\nexchange controls prompted short dollar covering, dealers said.
\nSuch fears had earlier been fueled by the central bank's more
\nstringent disclosure requirements on foreign exchange trades for
\nonshore banks.<\/p>\n
The dollar was at 42.475 baht, up from 42.425 baht late
\nThursday.<\/p>\n
Market participants were awaiting the outcome of the Thai
\ncentral bank's meeting with commercial bank treasurers Friday.
\nBank of Thailand was to clarify its new disclosure requirements
\non foreign exchange transactions, effective March 1, at the
\nmeeting.<\/p>\n
Most participants don't expect any surprises from the meeting
\nas there is little need for tighter rules with the baht having
\nrecovered from its lows late last year. However, they aren't
\ntaking any chances and refrained from taking any new positions,
\ndealers said.<\/p>\n
The Indonesian rupiah closed a touch lower on Friday as
\ninvestors bought the dollar in anticipation of the start of an
\noffshore non-deliverable forward market next week.<\/p>\n
The rupiah NDF market is an attempt by offshore banks to get
\naround new Bank Indonesia rules which ban the transfer of rupiah
\noffshore, and stop speculation against the local currency in the
\nforward market.<\/p>\n
A rupiah NDF market gets around the rules as it settles
\ncontracts only in dollars.<\/p>\n
But it could still have an effect on the rupiah in the spot
\nmarket, traders said. As players take out positions against the
\nrupiah in the NDF, this will have a sentiment effect on the
\nrupiah spot onshore. It could also lead to arbitraging between
\nthe different rates.<\/p>\n
\"If the NDF goes higher the spot, onshore will also go
\nhigher,\" a local trader said.<\/p>\n
In anticipation that the NDF market will lead to a renewed
\nfall in the rupiah - after a period of stability following the
\nban on offshore transfers - investors bought dollars in mild
\ntrade Friday.<\/p>\n
The dollar ended Asian trading at Rp 9,610, higher than Rp
\n9,600 at Thursday's close. The U.S. unit is seen testing Rp 9,625
\nnext week.<\/p>\n
Investors want to use the NDF market to effectively short the
\nrupiah amid concerns over political stability. President
\nAbdurrahman Wahid's 15-month-old government is losing support in
\nParliament, which wants him to step down over two financial
\nscandals.<\/p>\n
DBS Bank said the general tone of the market is to buy dollars
\nonce it becomes clear that the new disclosure requirements for
\nonshore parties on foreign exchange trades won't be a repeat of
\nIndonesia's currency regulations.<\/p>\n
Indonesia shocked market participants with regulations imposed
\nabout a month ago which effectively wiped out the offshore rupiah
\nmarket.<\/p>\n
At 0915 GMT, the Singapore dollar strengthened to S$1.7409
\nagainst its U.S. counterpart from S$1.7447 late Thursday,
\ninspired by gains in the yen, dealers said.<\/p>\n
Late in the day, the yen rallied on reported comments in a
\nGerman newspaper from U.S. Treasury Secretary Paul O'Neill that
\nthe Bush administration won't pursue a strong dollar policy.<\/p>\n
The dollar was quoted at Y114.80, down from Y115.47 late
\nThursday in New York. The dollar was at Y116.16 late Thursday in
\nTokyo.<\/p>\n
Before the yen's sharp advance, participants were sitting
\ntight ahead of the Monetary Authority of Singapore's policy
\nstatement Feb. 22.<\/p>\n
Trading in the won and the New Taiwan dollar had come to a
\nclose when the yen spiked higher late in the day on O'Neill's
\nreported remarks. Still, both currencies found reprieve from the
\nyen's overnight gains, dealers said.<\/p>\n
The dollar finished at 1,243.5 won, down from Thursday's close
\nof 1,247 won.<\/p>\n
Against the New Taiwan dollar, the U.S. currency closed at
\nNT$32.299, lower than NT$32.344 Thursday.<\/p>\n
On the Philippine Dealing System, the dollar closed at 47.550
\npesos, up from 47.490 peso Thursday.<\/p>",
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