Currencies defensive despite IMF cheer<\/p>\n
SINGAPORE (Reuters): Asian currencies firmed late yesterday
\nbut were crouched in defensive positions, reacting only mutely to
\na slew of positive comments from U.S. and IMF officials on the
\nprogress of financial reform in Asia.<\/p>\n
The Indonesian rupiah and Malaysian ringgit blipped up a
\nfraction, but the underlying tone was fragile, dealers said.<\/p>\n
\"We're into a correction phase ... the domestic accounts are
\nstill buying (dollars) and international players have not
\nreturned,\" said a manager with a U.S. institution.<\/p>\n
He said credit problems ahead were dampening enthusiasm and
\npeople were preparing for a re-rating of equity markets.<\/p>\n
Spot rupiah finished in late trade at 8,250\/8,350, up from a
\nlow of 9,000 and from an opening of 8,700\/8,900.<\/p>\n
Dealers said demand for dollars checked the rupiah's rebound
\nas optimism over Indonesia's fresh commitment to IMF-sponsored
\neconomic reforms burned less brightly than Thursday.<\/p>\n
Investors were heartened by Jakarta's agreement to tighten
\nIMF-led measures, but expressed varying confidence how these
\nwould be carried out and monitored.<\/p>\n
\"The weakness of the rupiah suggests the market is skeptical
\nabout the actual implementation progress,\" said Andy Tan, general
\nmanager of Standard & Poors\/MMS.<\/p>\n
President Soeharto said on Thursday Indonesia would cut
\nsubsidies on fuel, end tax breaks for the national car program
\nand dismantle monopolies in basic commodities.<\/p>\n
But the market was concerned that estimates of zero economic
\ngrowth, from a previously announced four percent, and 20 percent
\ninflation for the 1998\/99 fiscal year would eat into profits.<\/p>\n
The Malaysian ringgit recovered from its early low against the
\nU.S. dollar and was moderately buoyed by IMF chief Michel
\nCamdessus' remarks that Malaysia was not facing a crisis.<\/p>\n
Camdessus, on a tour of the region, said Malaysia had taken
\nimportant steps, especially in the area of fiscal policy, and did
\nnot need an IMF rescue package.<\/p>\n
The ringgit crept up to 4.2200\/4.2300 versus 4.2700\/00
\nearlier, and against late Thursday's 4.3000\/4000.<\/p>\n
In Singapore, the Sing dollar bounced off its low of 1.7700
\nper dollar to stand at 1.7355\/1.7385 up from 1.7525\/1.7595.<\/p>\n
Dealers said the perk in the ringgit was a factor, helped by
\nthe likelihood of firmer interest rates in the region.<\/p>\n
A major bank in Singapore announced a third hike in prime
\nrates, another 50 basis points to 7.5 percent, within two months.<\/p>\n
The Thai baht firmed late on exporter dollar sales and the IMF
\nchief's pledge to be flexible in a review of Thailand's $17.2
\nbillion rescue package, dealers said.<\/p>\n
The baht onshore edged up to 52.80\/53.10 per dollar at 1000
\nGMT against 53.45\/53.55 earlier and 52.90\/53.15 late Thursday.<\/p>\n
Offshore, the Thai unit was traded at 51.40\/51.70 per dollar
\nversus 51.80\/52.50 earlier.<\/p>\n
The Philippine peso inched up to 41.350\/450 per dollar against
\nThursday's 41.55 on foreign fund inflows and after the central
\nbank resumed its intervention, traders said.<\/p>\n
The bank was seen offering dollars at 41.40 by midsession
\nafter commercial demand heightened from a steadily rising peso.<\/p>\n
In North Asia, currencies held steady, underpinned by more
\nconfidence in South Korea from investment funds.<\/p>\n
The South Korean won ended at 1,618 to the dollar, a notch
\nlower than its opening at 1,610. It previously closed at 1,605.<\/p>\n
Dealers said this was a result of a correction after rising to
\n1,585 in early morning trade and that the won's rise was also
\nbeing checked partly by caution that conditions for a sustained
\nrise were not yet clear.<\/p>\n
U.S. Deputy Treasury Secretary Lawrence Summers, in South
\nKorea on Friday on the last leg of his Asian tour, said he was
\nencouraged by steps being taking to implement reforms there.<\/p>\n
Taiwan's dollar firmed, helped by the won and Japanese yen,
\nrising to T$33.792 against Thursday's T$33.980 close.<\/p>\n
It had risen for four consecutive sessions since sinking to a
\n10-year closing low of T$34.481 on Monday.<\/p>\n
Hong Kong's dollar also edged up on heavy dollar sales.
\nIt closed at HK$7.7370\/90 per dollar, up from 7.7390\/10 at the
\nopen and against Thursday's close at 7.7400\/7.7420.<\/p>\n
Rises were aided by the firmer stock market as fears eased of
\nan increase in debt financing problems.<\/p>",
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