SE Asian currencies uninspired by RI move<\/p>\n
SINGAPORE (Reuter): Southeast Asian currencies remained weak
\nyesterday as Indonesia's move to curb speculative dollar demand
\nby curbing forward foreign exchange transactions provided only a
\nbrief boost to the rupiah.<\/p>\n
It backed off an early high of 2,850 to the dollar as tumbling
\nswap rates triggered liquidation of long forward positions,
\ndealers said.<\/p>\n
Bank Indonesia said on Sunday it was limiting forward selling
\nagainst the rupiah by domestic banks to foreign customers to a
\nmaximum amount of $5 million per customer.<\/p>\n
Analysts saw the central bank move, similar to Malaysia's
\nrecently imposed controls and Singapore's long-standing ones, as
\nan effective minimum step to counter short-term speculation.<\/p>\n
A Singapore dealer said the rupiah's brief rise was due to
\nunderlying worries of a liquidity squeeze. \"But when liquidity
\nturned out to be okay and offshore was well prepared to face the
\nnew rules, spot dollars trended to reverse direction and might
\nstrengthen further,\" the dealer said.<\/p>\n
The rupiah was near its day lows at 2,950\/60 at 0945 GMT after
\nopening at 2,860\/90.<\/p>\n
The Malaysian ringgit followed the rupiah down, but dealers
\nsaid trade was subdued with Kuala Lumpur markets closed for a
\nnational holiday. The ringgit was quoted at 2.9200\/50 to the
\ndollar after firming to 2.9050 against 2.9040\/70 late on Friday.<\/p>\n
Dealers said the outlook for the ringgit remained bleak and it
\nwas expected to test the 3.00 to the dollar level soon, though
\nits recent low of 2.9670 would provide interim support.<\/p>\n
\"There are rumors the central bank will not allow it to go
\nabove 3.00, so the dollar's being capped above 2.9500 for now,\"
\nsaid the head of Asian currencies at a European bank.<\/p>\n
The Singapore dollar backed off a high of 1.5050 in tandem
\nwith the drop in other regional currencies.<\/p>\n
But dealers said its fall would be restricted by expectations
\nthe Brunei Investment Agency (BIA) might sell U.S. dollars to
\nsupport the Singapore dollar again.<\/p>\n
\"There's talk a Southeast Asian country is looking to sell
\ndollar\/Sing at 1.53 to protect its own currency because it's very
\nclosely linked to ours,\" the European bank dealer said.<\/p>\n
The Brunei dollar is pegged to the Singapore dollar under a
\ncurrency interchangeability agreement and on Friday, the
\nSingapore dollar bounced back sharply from a low of 1.5375 on
\ntalk the BIA was spending large amounts of U.S. dollars on buying
\nthe Singapore dollar and the ringgit.<\/p>\n
\"Friday's action was just to show token support. I don't think
\nthey can do much, but their presence certainly helped because
\nthey're one of the richest countries in the world,\" the dealer
\nsaid.<\/p>\n
The baht hit a new low onshore as worries about Thailand's
\npolitical direction and turmoil in regional markets prompted
\ndollar demand from companies seeking to hedge their positions.<\/p>\n
It was quoted at 34.55\/65 after falling as low as 34.60
\nagainst 34.18\/34.28 late on Friday. It was at 34.30\/50 offshore
\nagainst 34.05\/34.15.<\/p>\n
The Philippine peso gave up early gains triggered by a surge
\nin domestic interest rates after the central bank's new liquidity
\nreserves came into effect.<\/p>\n
The peso was at 30.37\/38 against an opening 30.25.<\/p>\n
Philippine Finance Secretary Roberto de Ocampo said rising
\ndomestic interest rates would eventually have to fall to prevent
\na contraction in the economy.<\/p>\n
The Taiwan dollar finished firmer after the central bank's
\nrenewed promise to defend it from the malaise afflicting the rest
\nof the region's currencies.<\/p>\n
It ended at T$28.618, off an intra-day high of T$28.590,
\nagainst Saturday's T$28.630 close, but dealers said it might have
\nmade too speedy a recovery and the central bank could use the
\nopportunity to buy back the U.S. dollar after dumping it heavily
\nto defend the local currency in recent weeks.<\/p>\n
The South Korean won finished lower in line with the dollar's
\nrise against the yen, but dealers said its fall was capped by
\nfears of central bank intervention.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/se-asian-currencies-uninspired-by-ri-move-1447893297",
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