Rupiah leads Southeast Asian currencies higher<\/p>\n
SINGAPORE (Reuter): Southeast Asian currencies were decidedly
\nmore upbeat yesterday as the Indonesian rupiah's strong gains and
\ntalk of funds unwinding long dollar positions lifted the gloom
\nover the region, at least for the moment.<\/p>\n
The rupiah breached the 2,700 resistance level early in the
\nday and remained on firm footing despite news that Standard &
\nPoor's (S&P) had revised its ratings outlook on Indonesian banks
\nto negative from stable.<\/p>\n
\"The downgrading caused the forwards to move higher. But on
\nthe spot, a lot of customers were unloading long dollar\/rupiah
\npositions or getting into carry trades because of the high
\ninterest rates,\" a U.S. bank dealer in Singapore said.<\/p>\n
The rupiah was quoted at 2,650\/60 at 0940 GMT against an
\nopening of 2,790\/2,810. It was at 2,770\/80 late on Wednesday.<\/p>\n
Dealers said the Indonesian central bank's move to keep a
\ntight rein on liquidity was drawing foreign funds back to the
\nrupiah, but its rise would be blocked at 2,650 and 2,580, partly
\nby Indonesian firms needing to cover unhedged positions.<\/p>\n
The rupiah has recovered by over 11 percent since the central
\nbank raised interest rates on Tuesday after the currency hit a
\nhistoric low of 3,045 to the dollar.<\/p>\n
Dealers said the rebound lifted sentiment for other regional
\ncurrencies, although the Thai baht continued to look jaundiced.<\/p>\n
The market was largely uninspired by International Monetary
\nFund (IMF) approval on Wednesday of $3.9 billion in loans, which
\nwill open the door to a $16.7 billion international loan package
\nto help bail out Thailand's troubled economy.<\/p>\n
Dealers said domestic players were concerned about a possible
\nlifting of Thailand's two-tier market which could lead to a
\nrenewed offshore attack on the baht.<\/p>\n
The baht was quoted at 32.65\/75 to the dollar onshore against
\n32.30\/32.45 late on Wednesday. The offshore rate was at
\n32.30\/32.50 against 31.80\/31.90.<\/p>\n
Dealers said the baht showed little reaction to Bank of
\nThailand Governor Chaiyawat Wibulswasdi's announcement that the
\ncountry would receive $1.6 billion in loans immediately as the
\nfirst installment of the IMF aid package.<\/p>\n
Chaiyawat also pledged to meet the IMF's economic goals to
\nreceive further aid.<\/p>\n
\"The market is still nervous being short dollars against the
\nbaht,\" the Singapore dealer said.<\/p>\n
The Malaysian ringgit came off its highs after S&P said it was
\ndowngrading the outlook for Malaysia's top banks to negative from
\nstable.<\/p>\n
But dealers said the ringgit still showed a relatively firm
\nbias and was quoted at 2.7650\/60 to the dollar at 0940 GMT after
\nhitting a high of 2.7565 against 2.7740\/90 late on Wednesday.<\/p>\n
The Singapore dollar firmed through the 1.50 level on talk of
\nlarge U.S. dollar sales by hedge funds.<\/p>\n
\"There were rumors U.S. funds were selling huge amounts of
\ndollar\/Sing around 1.5000 so it fell to 1.4950 where some profit-
\ntaking came in,\" the dealer said.<\/p>\n
\"Today the market was quite wild and there was not a lot of
\nrationale behind these moves,\" he said. The Singapore dollar was
\nunlikely to strengthen beyond 1.4700 to the U.S. dollar anytime
\nsoon, he added. It was at 1.4968\/78 at 0940 GMT.<\/p>\n
Sharp gains in Southeast Asian currencies kept the heat off
\nthe Hong Kong dollar, which has been bracing itself for a
\nspeculative onslaught since late last week.<\/p>\n
Hong Kong interbank rates rose early as investors switched
\nfunds into the surging stock market, but the Hong Kong dollar
\nremained relatively steady at HK$7.7420\/30 to the U.S. dollar.<\/p>\n
The Philippine peso was firm at 29.85\/95 in late trade against
\na previous close at 30.02 as the central bank kept its overnight
\nlending facility closed for a second day.<\/p>\n
Central bank governor Gabriel Singson said the move was a
\ntemporary measure aimed at curbing speculation in the peso.<\/p>\n
The Taiwan dollar ended at T$28.724 against Wednesday's
\nT$28.727 close as the central bank persisted in its defense of
\nthe T$28.727 level.<\/p>",
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