Ringgit and baht hit new lows on Mahathir remarks<\/p>\n
SINGAPORE (AFP): The Malaysian ringgit and the Thai baht hit
\nrecord lows yesterday after Malaysian Prime Minister Mahathir
\nMohamad's call for curbs on foreign exchange trading set off a
\nscare in regional markets.<\/p>\n
The ringgit closed at the psychological 3.1000 to the dollar
\nlevel in Asian trading, from 3.0225 last Friday, while the Thai
\nbaht ended at 36.30 offshore from 35.75. Other regional
\ncurrencies were infected by the ringgit's weakness.<\/p>\n
"It was very volatile and very uncertain all day," moaned a
\nforex dealer with a European bank.<\/p>\n
Stock markets were likewise jarred by Mahathir's remarks
\ndespite attempts by his deputy and finance minister Anwar Ibrahim
\nto contain the damage by saying there were no plans to change
\nMalaysia's foreign exchange trading rules.<\/p>\n
The lack of encouraging news from the global financial talks
\nin Hong Kong also whittled away at confidence in Southeast Asian
\ncurrencies, which have all plunged since the de facto devaluation
\nof the Thai baht on July 2.<\/p>\n
Apart from weakness generated by the ringgit, the baht, which
\nhit a low of about 36.40, was also hit by uncertainty ahead of a
\nno-confidence vote on Thai Premier Chaowalit Yongchaiyudh.<\/p>\n
The Indonesian rupiah closed at 3,020 from 2,980, largely as a
\nresult of the dreaded "contagion effect" in the region.<\/p>\n
"The ringgit ruined the day," said Maya Pinto, regional
\neconomist with British financial house I.D.E.A. "It dragged all
\nthe other regionals weaker."<\/p>\n
The ringgit also crossed the sensitive two-on-one level
\nagainst the Singapore dollar Monday.<\/p>\n
Mahathir proposed a ban on currency trading in a speech
\nSaturday in Hong Kong, calling it an "unnecessary, unproductive
\nand totally immoral" activity.<\/p>\n
The regional market, shaken by turmoil since early July, had
\nbeen hoping to get some solace from the ongoing annual meetings
\nof the International Monetary Fund (IMF) and World Bank (WB) in
\nHong Kong.<\/p>\n
But no concrete measures have emerged so far and Mahathir's
\ncomments on the sidelines of the Hong Kong financial jamboree
\nspooked traders Monday.<\/p>\n
His deputy Anwar Ibrahim, who is the finance minister, swiftly
\nstepped in to repair the damage, saying in Hong Kong on Sunday
\nthat there was "absolutely no change" in the rules and
\nregulations on foreign exchange trading in Malaysia.<\/p>\n
The Singapore dollar closed at 1.5270 from 1.5178 on Friday
\nfollowing the weekend release of lower-than-expected growth
\nfigures for crucial non-oil domestic exports, which rose 5.5
\npercent in August from a year ago.<\/p>\n
The Philippine peso was the exception in the region, opening
\nstrongly after a massive protest in Manila on Sunday was defused
\nby President Fidel Ramos's categorical vow to step down in 1998.
\nIt closed at 33.34 to the dollar, hardly changed from 33.33 on
\nFriday.<\/p>\n
The Philippine peso was the exception in the region, opening
\nstrongly after a massive protest in Manila on Sunday was defused
\nby President Fidel Ramos's categorical vow to step down in 1998.
\nIt closed at 33.34 to the dollar, hardly changed from 33.33 on
\nFriday.<\/p>\n
Analysts said the ringgit would have fallen more sharply if
\nDeputy Premier Anwar Ibrahim, who is also finance minister, had
\nnot tried to clear the air over Malaysia's foreign exchange
\npolicies.<\/p>\n
Anwar has canceled a scheduled U.S. visit to deal with
\n"pressing issues" at home, apparently referring to the currency
\ncrisis. He was due to address a UN General Assembly meeting
\nWednesday in New York.<\/p>\n
"If Anwar did not come out to reassure investors that the
\npolicies will not be changed for now, it would have been worse,"
\nsaid Alison Seng, analyst at research house Standard and Poor's
\nMMS.<\/p>\n
U.S. billionaire financier George Soros, who has been blamed
\nby Mahathir for allegedly leading attacks on the ringgit, lashed
\nout at the Malaysian leader over the weekend.<\/p>\n
"Dr. Mahathir is a menace to his own country," Soros told a
\nWorld Bank seminar in Hong Kong on Sunday, calling the Malaysian
\nleader a "loose cannon."<\/p>",
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