Asian monies rebound on RI's decision to allow peacekeepers<\/p>\n
HONG KONG (Dow Jones): Asian currencies rebounded strongly
\nMonday following Indonesia's decision to allow foreign
\npeacekeepers into East Timor.<\/p>\n
The Indonesian rupiah, the Thai baht and the Philippine peso
\nall strengthened rapidly at the start of local trading hours, as
\nmarket participants responded to President B.J. Habibie's late-
\nSunday announcement by rushing to liquidate long U.S. dollar
\npositions established ahead of the weekend.<\/p>\n
In conditions of near-total illiquidity, rupiah purchases
\nworth as little as $20 million were sufficient to drive the
\nrupiah up by 8 percent from levels seen late Friday, said
\ntraders, as the U.S. currency was sold down to an intraday low of
\n7,700 rupiah.<\/p>\n
The effect proved relatively short-lived, however, as heavy
\nbuying of dollars against the rupiah by a major U.S. bank in
\nSingapore soon lifted the U.S. currency off its low.<\/p>\n
Although the crisis in East Timor may have abated, the outlook
\nfor the rupiah remains bleak, as market participants focus once
\nagain on the scandal centered on the irregular transfer of $80
\nmillion from Bank Bali to a company closely associated with
\nHabibie's Golkar party.<\/p>\n
\"The rupiah was sold off last week on fears that international
\naid to Indonesia would be halted because of the East Timor
\nsituation,\" said a regional-currency trader at a U.S. bank in
\nSingapore.<\/p>\n
\"Pressure from that quarter has eased now, but there is still
\nthe Bank Bali case. Everybody knows how unhappy the International
\nMonetary Fund is about that, so the market will not be so
\ntrigger-happy to buy up the rupiah again,\" he said.<\/p>\n
Toward the end of Asian interbank trading, the U.S. currency
\nwas quoted at Rp 7,850. Although at that level the dollar was
\nconsiderably above its earlier low, it remained well down from Rp
\n8,312 late Friday.<\/p>\n
In the short term, heavy bidding interest should support the
\nU.S. currency above Rp 7,800, said traders, although offers from
\nmarket participants caught long dollars at higher levels should
\ncap the market at Rp 8,000.<\/p>\n
There was no impact on trading from the announcement by
\nratings agency Standard & Poor's Corp. that it was placing
\nIndonesia on CreditWatch with negative implications because of
\nthe threat to international lending posed by the East Timor
\ncrisis. Dealers shrugged off the news, saying S&P was about two
\nweeks behind the rest of the market.<\/p>\n
Trading in the baht followed a similar pattern. After
\nstrengthening at the start of Asian trading, the Thai currency
\nlater gave back some of its initial gains in response to dollar
\npurchases, mostly executed by U.S. banks in the offshore market.<\/p>\n
Late in Asian trading, the U.S. dollar was quoted at 39.3200
\nbaht, up from its earlier low of 39.2300 baht but below 39.4450
\nbaht late in Asian dealing Friday.<\/p>\n
The Philippine peso, too, weakened from its early high, but
\nstill ended local trading well up on the day.<\/p>\n
After a rash of long liquidation propelled the dollar to an
\nearly low of 39.730 pesos, the U.S. currency clawed its way
\nhigher again during the remainder of the session.<\/p>\n
At the close of trading the U.S. dollar was quoted at 39.860
\npesos, up from a low of 39.730 pesos, but down from 39.943 pesos
\nFriday.<\/p>\n
Against the Singapore dollar, the U.S. currency ended Asian
\ntrading hours at S$1.6890, compared with S$1.6884 late Friday.<\/p>\n
In other markets, the Korean won closed marginally higher
\nagainst the U.S. dollar, its rise assisted by the yen's continued
\nstrength against the U.S. currency and a positive assessment of
\nKorea's economic outlook from finance and economy minister Kang
\nBong-kyun.<\/p>\n
At the Seoul close the U.S. dollar was at 1,191.80 won, down
\nslightly from 1,192.20 won at the end of Friday's trading
\nsession.<\/p>\n
In Taipei, the U.S. currency closed at NT$31.780 against the
\nNew Taiwan dollar, down from NT$31.800 on Friday.<\/p>",
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