Southeast Asian currencies take a dive<\/p>\n
SINGAPORE (AFP): Southeast Asian currencies fell across-the-
\nboard yesterday amid market concern that Malaysia might renege on
\nits promise to shelve mammoth projects and fears that a global
\nfinancial rescue package for Thailand will fall apart, dealers
\nsaid.<\/p>\n
Big dips in the Malaysian ringgit and Thai baht against the US
\ndollar dampened sentiment and pulled down the other regional
\ncurrencies as well, they said.<\/p>\n
"Events today suggest that the road to recovery for the
\nregional currencies will be fraught with difficulties," Andy Tan,
\ngeneral manager of U.S. research house Standard and Poor's MMS in
\nSingapore.<\/p>\n
The ringgit ended sharply lower at 2.9910 against the US
\ndollar from Monday's close of 2.9420 amid reports that the
\ndeveloper of the proposed Bakun dam in Malaysia was finalizing a
\nnew building agreement with a foreign contractor to get the
\nmassive project going.<\/p>\n
Prime Minister Mahathir Mohamad and his deputy, Anwar Ibrahim,
\nhad given repeated assurances to foreign funds that the Bakun
\nproject costing about 15. 5 billion ringgit (US$5.34 billion)
\nwould be shelved to avoid further widening of the nation's
\ncurrent account deficit.<\/p>\n
Malaysia's deficit at present stands at 12.3 billion ringgit,
\nor 5.2 percent of the country's gross national product (GNP).
\n"The market looks concerned by the reports because there will be
\nno policy consistency if Bakun goes ahead," said Jimmy Koh,
\nregional economist with British financial house I.D.E.A.<\/p>\n
Other analysts said speculators also tried to chase the
\nringgit to the 3. 0000 level against the greenback.<\/p>\n
Tan of MMS said: "I think if the U.S. dollar breaks above the
\n3.0000 level against the ringgit, then the ringgit will be at
\nrisk to test its recent (record) lows against the US and
\nSingapore currencies."<\/p>\n
The ringgit's plunged to a record low of 3.0520 against the
\nU.S. dollar and dived to a record low of 0.4972 against the
\nSingapore dollar earlier this month.<\/p>\n
The baht ended at 35.54 against the U.S. dollar from Monday's
\nclose of 35.18 after a leading Hong Kong newspaper reported that
\nthe International Monetary Fund (IMF) might withdraw a US$17.2
\nbillion financial rescue package to Thailand if it did not
\nproceed with rapid financial reforms.<\/p>\n
"The report sent the baht down against the dollar and most
\nother Southeast Asian currencies followed suit," said Alison
\nSeng, an analyst with MMS here.<\/p>\n
The reforms being pushed by the IMF as part of global aid
\npackage included streamlining of Thailand's financial sector,
\nwhich has been reeling since the baht was floated on July 2 and
\ntriggered off regional currency turmoil.<\/p>\n
The Indonesian rupiah closed at 2,948\/52 against the U.S.
\ndollar from Monday's opening of 2,930\/38 as Jakarta announced it
\nwould reschedule Rp 3.27 trillion (US$1.1 billion) worth of
\nbudgeted projects.<\/p>\n
The Philippine peso ended lower at 32.40 against the US dollar
\nfrom Monday's close of 32.26 as Philippine central bank governor
\nGabriel Singson moved to assure foreign investors that Manila
\nwould not resort to investment and foreign exchange controls.<\/p>\n
"Let me also assure you that we have never even considered
\nimposing restraints on the repatriation of foreign investments or
\nthe servicing of legitimate foreign exchange obligations,"
\nSingson said in a speech to the European Chamber of Commerce in
\nManila.<\/p>\n
The Singapore dollar also ended lower at 1.5135 against the
\ngreenback from Monday's close of 1.5115.<\/p>",
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