Rupiah, Thai baht extend declines<\/p>\n
SINGAPORE (Dow Jones): The Philippine peso Thursday parted
\nways with other Southeast Asian currencies to trade higher
\nagainst the U.S. dollar, after the country introduced new
\ncurrency measures Wednesday, dealers said.<\/p>\n
The Singapore dollar remained weak while the Indonesian rupiah
\nand Thai baht extended their recent declines. In North Asia, the
\nSouth Korean won and the New Taiwan dollar continued their
\nuptrend.<\/p>\n
Ongoing political uncertainty in Indonesia continued to roil
\nthe rupiah. At it's local Asian close, the U.S. dollar was quoted
\nat Rp 7,423, up from Rp 7,385 late Wednesday.<\/p>\n
A small bomb blast Wednesday night at the main mosque in
\nYogyakarta has raised concerns that inter-religious strife will
\nsweep into the main island of Java from outlying areas.<\/p>\n
The blast comes at a time of escalating sectarian violence in
\nthe Maluku islands and follows a rash of church-burning on the
\nisland of Lombok.<\/p>\n
The impact of Indonesian President Abdurrahman Wahid's
\nattempts to curtail the power of the military have also yet to be
\nseen. Wahid confirmed Thursday that he has signed a presidential
\ndecree releasing four military officers serving in his Cabinet -
\nincluding General Wiranto, the present security minister - from
\nactive duty.<\/p>\n
While longer-term investors warily eyed new currency controls
\nin the Philippines, traders rushed to buy the peso to avoid
\ngetting burned by tighter liquidity or even further restrictions.<\/p>\n
The U.S. dollar closed at 40.380 pesos, lower from PHP40.495
\nlate Wednesday.<\/p>\n
The Philippine central bank said Wednesday it will impose a
\n90-day lock-in period for foreign funds placed in time deposits.<\/p>\n
Central bank Deputy Governor Amando Tetangco said the rule was
\naimed at \"plugging loopholes in the present system, which has
\nbeen observed to be a source of (currency) volatility now and
\nthen.\"<\/p>\n
Analysts said the move triggers fears that other currency
\ncontrol measures will be introduced, perhaps even threatening
\nstock market investment.<\/p>\n
The uncertainty over further policy moves will deter longer-
\nterm investment in the peso and boost the case for a higher U.S.
\ndollar, they said.<\/p>\n
\"The move raises the country's risk profile,\" said Neil Saker,
\nhead of economic research at SG Securities.<\/p>\n
But traders, worried about tighter liquidity in the market,
\nare playing it safe for now and taking advantage of the higher
\nreturn as three-month rates hover around 10 percent.<\/p>\n
Lian Chia Liang, currency strategist at Merrill Lynch, said
\nthe peso's attractive interest rates could offset negative
\nsentiment in the short term, and allow it to catch up with the
\nThai baht's large gains over the past few months.<\/p>\n
\"The baht has strengthened significantly, so people may go
\nlong the peso and short the baht,\" Lian said. \"Some people are
\nthinking along those lines.\"<\/p>\n
Saker at SG Securities also said something to look out for is
\nthe International Monetary Fund's reaction to the Philippines'
\ncurrency measure, particularly since it has softened its tone on
\ncurrency controls aimed at curbing short-term capital flows.<\/p>\n
Meanwhile, though the Singapore dollar managed to come off its
\nintraday lows, it couldn't shake its weak tone against the U.S.
\ndollar.<\/p>\n
Late in Asia trade, the U.S. dollar was quoted at S$1.6890,
\nlittle changed from S$1.6891 late Wednesday, but lower than its
\nintraday high of S$1.6940.<\/p>\n
Analysts variously attributed the Singapore dollar's weakness
\nto political unrest in nearby Indonesia and to Singapore
\ncompanies opting to invest their money overseas.<\/p>\n
Although market players quibbled over whether actual U.S.
\ndollar buy orders are being placed by Singapore corporates, they
\ndid agree that the news of major deals, such as the one announced
\nearlier this week involving Singapore Telecommunications Ltd. and
\nCable & Wireless HKT, is taking a psychological toll.<\/p>\n
Some players suggested that Singapore Airlines Ltd. has begun
\nquietly accumulating U.S. dollars to pay for their acquisition of
\na stake in Virgin Airways.<\/p>\n
In North Asia, the dollar fell against the South Korean won,
\nending the session at 1,125 won, down from 1,127.20 won late
\nWednesday.<\/p>\n
Against the New Taiwan dollar, the U.S. currency ended at
\nNT$30.778, lower than NT$30.794 the previous day.<\/p>",
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