SE Asian moneys rise, then fall with baht<\/p>\n
BANGKOK (Reuter): Southeast Asian currencies ended higher but
\nbelow their best levels yesterday with the Thai baht giving up an
\nearly strong gain as operators took the opportunity to hoover up
\ncheaper U.S. dollars.<\/p>\n
Regional currencies were initially dragged up by the baht to
\nlevels not seen in a week, as optimism about an impending rescue
\npackage for Thailand's ailing economy spread through the region.<\/p>\n
But while the Thai government's decision to seek help from the
\nInternational Monetary Fund (IMF) boosted sentiment, there was
\nstill a long way to go and it was much too early to say the
\nproblems are over, dealers said.<\/p>\n
"Today was a good example of how nervous people still are,"
\nsaid one Singapore-based bank dealer. "All the regionals followed
\nthe baht up this morning, but then some corporates and others
\nsaid 'oh look, cheap dollars', and everything came back."<\/p>\n
The Thai baht was at 31.50 to the dollar onshore at 0800 GMT
\nafter firming to 30.45 against 31.90-32.00 late on Monday. It was
\nat 31.20 in offshore markets against a high of 30.00.<\/p>\n
Dealers said the baht's morning rise was accelerated by
\nrelatively thin trading volumes.<\/p>\n
"The baht has been trading very strong since they announced
\nthis (IMF news). But Thailand still needs lower interest rates so
\ndollar\/baht will not have much room on the downside," a dealer
\nsaid.<\/p>\n
Analysts said it was still Thailand's fortunes shaping
\nsentiment for the entire region and all eyes would be on the
\neconomic rescue package likely to be announced on August 5.<\/p>\n
Thai central bank governor Rerngchai Marakanond's resignation
\nhad been expected for some time and some players even viewed his
\ndeparture as a positive development, blaming him for Thailand's
\neconomic crisis.<\/p>\n
Rerngchai said he quit because of public criticism and
\npolitical pressure but some analysts reckoned that it was more
\nbecause the IMF will be calling the shots, not the central bank.<\/p>\n
"It makes no difference who will be Rerngchai's successor in
\nterms of policy. I would say for the next six months, the new
\ngovernor would not have much choice but to walk to IMF line,"
\nsaid Kitti Limsakul, economics lecturer at Chulalongkorn
\nUniversity.<\/p>\n
In Malaysia, the ringgit benefited from the baht's partial
\nrecovery and continued nervousness about the possible imposition
\nof capital controls after Prime Minister Mahathir Mohamad's
\nthreats against speculators on Monday.<\/p>\n
Dealers said stop-loss dollar sales and thin volumes added to
\nthe ringgit's gains and reckoned it was likely to benefit from
\nmonth-end demand and speculation of possible curbs.<\/p>\n
In late trade the ringgit was at 2.6210 per dollar after a
\nhigh of 2.6170 and Monday's late 2.6350.<\/p>\n
The Indonesian rupiah rose on offshore dollar sales but
\ndealers said domestic dollar demand was blocking further rises
\naround the 2,550 level.<\/p>\n
"I think we may see attempts to break the 2,550 level as
\nregional markets recover," a U.S. bank dealer in Jakarta said.<\/p>\n
The Singapore dollar extended its rise, firming through the
\nkey 1.46 at one stage after breaching 1.47 in Monday afternoon
\nbusiness.<\/p>\n
But the Taiwan dollar caved in to weeks of pressure, falling
\nthrough a key support of T$28 in early trade as the central bank
\ndropped its defense of that level, Taipei dealers said. It was at
\nT$28.159 at 0800 GMT against Monday's T$27.972 close.<\/p>\n
They said recent pressure on the Taiwan dollar stemmed from
\nthe U.S. dollar's rally against major currencies and from some
\nspeculative attacks in the form of non-delivery forward trading.<\/p>",
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