Rupiah's sparks enliven dull trading day<\/p>\n
SINGAPORE (Dow Jones): In a day of generally muted trading in
\nSoutheast Asian currency markets Tuesday, the Indonesian rupiah
\nprovided the only sparks.<\/p>\n
Fears that Bank Indonesia was attempting to push the rupiah
\nupward to end the fiscal year at an unrealistically high level
\ntriggered a minor panic in early trading as offshore banks rushed
\nto cover their short positions in the Indonesian currency.<\/p>\n
Although the stampede propelled the rupiah up by 4 percent
\nwithin a matter of minutes, the excitement proved short-lived. By
\nlate in Asian trading hours the Indonesian currency had handed
\nback most of its early gains to finish the day barely changed
\nfrom levels seen on Monday.<\/p>\n
In fact, with just one day to go to the end of Indonesia's
\nfiscal year, the rupiah was within a fine whisker of its level 12
\nmonths ago at the end of the previous fiscal year.<\/p>\n
Elsewhere in Southeast Asia, the baht ended the session range-
\nbound, despite the announcement of significant fiscal easing by
\nthe Thai government and the release of figures revealing a dismal
\nexport performance in February.<\/p>\n
The Singapore dollar and the Philippine peso both drifted
\nsideways, while in North Asia the South Korean won and the new
\nTaiwan dollar also closed little changed.<\/p>\n
The flurry of activity in the rupiah market followed the news
\non Monday that an international syndicate of 70 creditor banks
\nhad agreed to restructure US$210 million of principal on a $350
\nmillion commercial loan.<\/p>\n
When the word got out that Bank Indonesia was buying rupiah at
\n"value today" - for settlement on Tuesday, as opposed to the
\nnormal "spot" transactions which settle two days subsequently -
\nthere was a brief panic among the U.S. dollar bulls.<\/p>\n
Traders assumed that by buying at value today and sucking
\navailable rupiah liquidity from the market, the central bank was
\nmounting a major support operation ahead of the end of the fiscal
\nyear.<\/p>\n
Bailout<\/p>\n
Anxious to cut their losses, U.S. and European banks were seen
\nbailing out of their short rupiah positions in the offshore
\nmarket, driving the Indonesian currency sharply higher.<\/p>\n
But after being driven to a low of Rp 8,500, down from Rp
\n8,815 at the start of Asian trading, the U.S. currency soon
\nrecovered its losses after meeting buying interest from onshore
\nbanks.<\/p>\n
By the end of Asian dealing the U.S. currency had edged back
\nup to Rp 8,725, a little down from 8,850 in Jakarta late Monday.<\/p>\n
With the spot market all but closed down by Bank Indonesia's
\naction on Tuesday, traders expect little activity Wednesday as
\nthe fiscal year actually draws to a close.<\/p>\n
Elsewhere in Southeast Asia, the Thai baht was left unmoved by
\nthe government's announcement of a 55 billion baht program of
\nfiscal easing centered on a cut in value-added tax.<\/p>\n
There is little prospect of any significant movement in the
\nbaht's exchange rate in the immediate short term however. Traders
\ndescribe the currency as tightly range-bound, with good interest
\nto buy the U.S. dollar supporting the U.S. currency at 37.50
\nbaht, and selling interest capping its rise at 37.80.<\/p>\n
Late in Asian dealing on Tuesday, the U.S. dollar was at
\n37.6750 baht, little changed from 37.6650 the day before.<\/p>\n
The U.S. currency was also range-bound against the Singapore
\ndollar, trapped between bids at S$1.7310 and offers at S$1.7340,
\naccording to dealers. In late Asian trading, the U.S. dollar was
\nquoted at S$1.7336, up slightly from S$1.7306 late on Friday. The
\nlocal market was closed for a holiday on Monday.<\/p>\n
Against the Philippine peso, the U.S. dollar closed at 38.775
\npesos, barely changed from 37.770 pesos the day before.<\/p>\n
Against the won the U.S. dollar ended at 1,224.60 won, down a
\nfraction from 1,225.30 on Monday. Against the new Taiwan dollar
\nthe U.S. currency ended the day at NT$33.145, compared with
\nNT$33.150 the previous day.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/rupiahs-sparks-enliven-dull-trading-day-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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