Thai Baht and RP peso hit record lows against dollar<\/p>\n
SINGAPORE (AFP): Southeast Asian currencies led by the Thai
\nbaht and Philippine peso dived to record lows against the dollar
\nyesterday as the region's monetary crisis began its third month
\nwith the bottom far from view.<\/p>\n
The central Bank of Thailand was seen intervening in the
\nmarket when the baht touched a new low of 37 to the dollar in
\ndomestic trade after credit risk analysts Standard and Poor's
\ndowngraded Thailand's long-term foreign currency rating.<\/p>\n
The baht clawed back to the 36 level mid-afternoon but
\nanalysts said they believed this may not hold for long.<\/p>\n
\"Sentiment is still bearish so you can see the 37.00 level
\ntested again,\" said Maya Pinto, regional economist with British
\nresearch house I.D.E.A. in Singapore. \"They don't have much
\nammunition in terms of foreign reserves.\"<\/p>\n
Offshore the baht stood a shade below 35.00 mid-afternoon,
\nafter closing at 34.45 Tuesday.<\/p>\n
The contagion effect was in evidence again as the Indonesian
\nrupiah and Malaysian ringgit also plunged to new lows before
\npulling back.<\/p>\n
The rupiah touched a record low of 3,060 before the central
\nbank of Indonesia was rumored to be stepping in, bringing the
\nunit up to around 3,000 mid-afternoon, up from Tuesday's close of
\n3,030. The ringgit hit a low of 2. 9735 but was hovering around
\nthe 2.9500 level mid-afternoon.<\/p>\n
\"It's all because of the baht,\" said Alison Seng, an economist
\nwith Standard and Poor's research house MMS in Singapore. \"The
\ndollar-baht has rallied tremendously since yesterday when local
\ncorporates panicked.\"<\/p>\n
\"The market will still take it up again because there is
\ngenuine demand, from the corporates especially,\" she added.<\/p>\n
The Philippine peso plunged to a new low of 31.83 to the
\ndollar, from Tuesday's close of 30.688, on expectations that the
\nMonetary Board would relax bank liquidity reserve requirements
\nwhich have driven up interest rates.<\/p>\n
Philippine economic planning chief Cielito Habito conceded
\nthat the country was \"very unlikely\" to meet its target of seven
\npercent growth in gross national product this year because of
\nhigh interest rates which have soared beyond 30 percent, bleeding
\nbusinesses dry.<\/p>\n
The confirmation of a slowdown was expected to put even
\nfurther pressure on the peso.<\/p>\n
Amid the regional bedlam, the Singapore dollar was an oasis of
\ncalm, trading firmer at 1.5145 to the greenback mid-afternoon,
\ncompared to Tuesday's close of 1.5227.<\/p>\n
The baht was already falling fast on political worries even
\nbefore Standard and Poor's downgraded Thailand's long-term
\nforeign currency debt rating to \"A-\" from \"A,\" affecting an
\nestimated US$3.3 billion in obligations.<\/p>\n
\"A further downgrade could occur if continued weak political
\nleadership impedes restoration of political credibility through
\nimplementation of financial sector reforms and adherence to the
\nIMF stabilization program,\" the rating agency said.<\/p>\n
The agency also lowered Thailand's long-term local currency
\nrating from \"AA\" to \"AA minus,\" it said.<\/p>\n
\"It's just more bad news,\" said David Cohen, senior economist
\nwith MMS in Singapore.<\/p>\n
Even before the ratings downgrade, the Thai market was already
\non edge ahead of a key parliamentary debate Thursday on a draft
\nconstitution, with coup rumors denied by the army top brass.<\/p>",
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