Asian monies up amid rupiah control rumors<\/p>\n
HONG KONG (Dow Jones): Talk of capital controls in Indonesia
\nrippled briefly through Asian foreign exchange markets on
\nThursday, but the effects were short-lived and most currencies
\nended slightly stronger in quiet dealings.<\/p>\n
The U.S. dollar gained on the Philippine peso, but was down
\nagainst the Indonesian rupiah, the Thai baht, Singapore dollar
\nand Korean won.<\/p>\n
\"Dollar\/rupiah was sold down on the rumor that there could be
\nsome offshore trading restrictions put on the rupiah and bought
\nback when that was officially denied,\" said a dealer with a U.S.
\nbank in Singapore. The rupiah's regional counterparts loosely
\nfollowed the brief upturn, he said, reporting thin dealings in
\nall markets.<\/p>\n
Indonesia's central bank isn't considering any form of
\nrestrictions on offshore rupiah trading, said Halim Alamsyah
\nThursday, who is head of the central bank governor's office. A
\nIndonesian newspaper report set off the talk, but the senior
\nofficial said the story had misquoted the central bank.<\/p>\n
The U.S. dollar was quoted at Rp 8,310 late Thursday, down
\nfrom Rp 8,385 late Wednesday, but up from a low of Rp 8,255 after
\nthe capital control rumor.<\/p>\n
\"This is the fourth time this year (the markets) have heard
\nthis,\" said Rebecca Patterson, JP Morgan currency strategist, and
\ntraders say they'll keep a wary eye on the issue. \"If there's no
\nfire, there's no smoke,\" said one trader of the persistent talk
\nof controls.<\/p>\n
But Patterson said \"it would be extremely difficult for
\nIndonesia to impose effective capital controls.\" Her firm
\nmaintains its view that the rupiah is in for more weakness over
\nthe medium term.<\/p>\n
The other issue of the day, said Patterson, was the sharp move
\nin the South Korean stock exchange, where the Kospi index closed
\ndown 4.2 percent, although that's not had any adverse effect on
\nthe local currency yet.<\/p>\n
The U.S. dollar was trading at 1,108.30 won, down from
\n1,108.50 won late Wednesday.<\/p>\n
Foreign investors were selling shares such as Samsung
\nElectronics and Hyundai Electronics Industries amid persistent
\nworries about the outlook for the South Korean semiconductor
\nindustry, traders said.<\/p>\n
Some market watchers said investors may have also been worried
\nby unfounded rumors that Samsung would soon face some sort of
\ncredit rating adjustment. However, the source of the
\nmisconception may have been news a few days ago that UBS Warburg
\nhad downgraded its recommendation on the stock from a \"strong
\nbuy\" to a \"buy\".<\/p>\n
At any rate, Patterson said traders really should buy any
\nweakness in the won should it occur, based on JP Morgan's view
\nthat the currency is likely to continue strengthening.<\/p>\n
In Southeast Asia, dealers in Singapore said the Thai baht is
\nlocked in a fairly tight range between 40.87 baht and 40.96 baht
\nto the dollar. It was quoted late Thursday at 40.935 baht, down
\nfrom 40.985 baht late in the previous session.<\/p>\n
The Singapore dollar is likewise a little stronger, but in
\nwhat dealers said was quiet trade. The U.S. dollar was quoted at
\nS$1.7192 late Thursday, down from S$1.7230 in the previous
\nsession.<\/p>\n
Elsewhere, the dollar closed at 45.110 pesos, up slightly from
\n45.087 pesos. The U.S. dollar ended at NT$31.067, unchanged from
\nlate Wednesday.<\/p>",
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