SE Asian currencies take roller-coaster ride<\/p>\n
SINGAPORE (AFP): Bruised Southeast Asian currencies went
\nthrough a roller-coaster ride yesterday as markets were driven by
\nfears of central bank intervention and more capital controls
\nacross the region, dealers said.<\/p>\n
The Philippine peso dived to a new all-time low, forcing a
\nsuspension of the currency's trading in Manila while the
\nSingapore dollar sank to levels unseen in 41 months after Finance
\nMinister Richard Hu said the Singapore unit would be gradually
\ninternationalized.<\/p>\n
Earlier, the Singapore dollar together with the Malaysian
\nringgit, Indonesian rupiah and the Thai baht, all of which were
\nhammered down rapidly in recent days, surged against the
\ngreenback amid fears that government would step up foreign
\nexchange controls.<\/p>\n
The fears, coupled with reported market intervention by the
\nIndonesian and Malaysian central banks to shore up their
\ncurrencies, stemmed from a technical glitch by financial news
\nagency Reuters, dealers said.<\/p>\n
The agency had released two sets of quotes for the dollar --
\ninstead of the usual one -- against the ringgit, rupiah, peso and
\nSingapore dollar.<\/p>\n
The dealers said the quotes purportedly for currencies traded
\noffshore and onshore gave rise to a perception in the market that
\ngovernments had moved to impose restrictions on the supply of
\ntheir currencies to foreigners.<\/p>\n
"The two sets of quotes spooked the market and people started
\ndumping the U.S. dollar against the regionals," a dealer with a
\nEuropean financial house said, adding that fears escalated after
\nreported intervention by the Indonesian and Malaysian central
\nbanks.<\/p>\n
The rupiah recovered by a remarkable 5.6 percent to 3,505
\nagainst the U.S. dollar in early trading from Monday's record-low
\nclose of 3,715, the Malaysian ringgit was sharply higher at
\n3.2400 from 3.3700, the Singapore dollar was up to 1.5380 from
\n1.5516 and the Thai baht offshore rose to 35.10 from 36.70.<\/p>\n
"The glitch today was also an excuse for people long on the
\nU.S. dollar against the regionals to take profit," said Jimmy
\nKoh, regional economist with London-based financial house
\nI.D.E.A.<\/p>\n
But the regional currencies lost some steam as market players
\nbuilt up fresh U.S. dollar positions after they came to know of
\nthe glitch and the financial news agency offered a clarification,
\ndealers said.<\/p>\n
"It was a technical hitch on our main Asian foreign exchange
\ndisplay generated from a computer based in London which ended up
\ndisplaying more than one consolidated quote for each of the four
\ncurrencies," Miyuki Suzuki, Singapore-based managing director of
\nReuters Southeast Asia, told AFP.<\/p>\n
The rupiah ended Asian trading at 3,690 against the U.S.
\ndollar, the ringgit at 3.2750, the baht at 35.80, the Singapore
\ndollar at 1.5580 and the Philippine peso at 35.40 off their
\nintra-day lows.<\/p>\n
The Singapore dollar hit a 41-month low of 1.5650 after
\nMinister Hu said in parliament that the Singapore unit would be
\nslowly globalized but not at the expense of the city state's
\neconomy, dealers said.<\/p>\n
Hu said the Monetary Authority of Singapore, the de facto
\ncentral bank, will "allow a gradual increase in use of the
\nSingapore dollar for international purposes" without disrupting
\nthe domestic economy.<\/p>\n
Trading of the Philippine peso was suspended twice in Manila
\nwhen the currency experienced sharp falls, hitting a new all-time
\nlow of 35.981 against the dollar.<\/p>\n
Dealers said heavy demand for U.S. dollars had weighed down
\nthe peso which fell below a "volatility band" that took effect
\nyesterday, whereby trading temporarily halts if the peso falls
\nbeyond a certain level.<\/p>\n
While some analysts said the recovery of some of the regional
\ncurrencies yesterday was something temporary, others felt the
\nworst might be over for the currencies.<\/p>",
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