SE Asian foreign exchange markets barely move<\/p>\n
SINGAPORE (Dow Jones): Southeast Asian foreign exchange
\nmarkets were barely active yesterday, the majority finishing
\nAsian hours almost utterly flat on the day.<\/p>\n
Most traders and analysts considered the relief from
\nvolatility a temporary phenomenon, however.<\/p>\n
The resignation on Thursday of Indonesia's President Soeharto
\nand his replacement by former Vice President B.J. Habibie, has
\ndone little to change the grim outlook for regional currencies.<\/p>\n
The rupiah itself scarcely traded yesterday, even though Bank
\nIndonesia resumed clearing operations, which had been suspended
\nfor much of the week.<\/p>\n
The Singapore dollar and the Malaysian ringgit saw healthier
\nvolumes, although few participants were prepared to establish
\nfresh positions ahead of the weekend, leaving the markets little
\nchanged on the day.<\/p>\n
Only the Thai baht moved appreciably, dropping abruptly in
\nearly trading after parliamentary opposition groups late Thursday
\nthwarted the government's plans to issue debt to fund the
\nrestructuring of Thailand's crippled finance sector.<\/p>\n
Bone-dry liquidity and mile-wide spreads deterred all but the
\nmost desperate from attempting to deal in the rupiah, which as a
\nresult was left unmoved by the announcement yesterday morning of
\nIndonesia's new cabinet line-up.<\/p>\n
Late in Asia the U.S. dollar was quoted at an indicative rate
\nof Rp 10,850, down from an indicative Rp 11,200 late in Asian
\ntrading Thursday. The bid-to-offer spread was quoted at Rp 700.<\/p>\n
The apparent stability of the rupiah and other regional
\ncurrencies persuaded few market participants that Southeast Asian
\nmarkets had bottomed out.<\/p>\n
\"The regional currencies are not a very good indicator of the
\nrisk in Asia at the moment, because there is no liquidity,\"
\nwarned Thio Chin Loo, regional strategist at Banque Paribas in
\nSingapore.<\/p>\n
Other analysts and traders agreed with this analysis.<\/p>\n
Although the regional currencies may well strengthen into the
\ncoming week, the move will be unsustainable in the longer term,
\nsay traders.<\/p>\n
Attention will focus on whether Indonesia's new president can
\nsuccessfully consolidate his grasp on power or popular protest
\nfor political reform will force his resignation too.<\/p>\n
\"It is very unlikely that Habibie can survive as president,\"
\nsaid Thio at Paribas.<\/p>\n
Most susceptible to instability in Indonesia are the Singapore
\ndollar and the Malaysian ringgit.<\/p>\n
With the rupiah moving little, against the Singapore dollar
\nthe U.S. currency ended Asian trading at S$1.6379, down a
\nfraction from S$1.6385 late Thursday.<\/p>\n
Against the Malaysian currency the U.S. dollar ended at 3.7970
\nringgit, compared with 3.7675 the previous day.<\/p>\n
In Thailand, fractious politics once again rocked financial
\nmarkets after parliamentary opposition parties late Thursday
\nblocked four government decrees paving the way for the issue of
\n700 million baht of domestic and international debt.<\/p>\n
\"This is a negative, but a welcome negative,\" said Saker at
\nCrosby, who said the setback for the Thai government had served
\nas a wake-up call for investors.<\/p>\n
Late in Asia the U.S. dollar closed at 39.33 baht, up from
\n39.08 toward Thursday's Asian close. Most traders expect the U.S.
\ncurrency to strengthen further in the coming week, as market
\nparticipants cover short dollar positions following the
\ngovernment's reversal.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/se-asian-foreign-exchange-markets-barely-move-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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