Won continues slide despite govt efforst<\/p>\n
SINGAPORE (Reuters): Asian currencies were shrouded in gloom
\nyesterday as the South Korean won sank to new lows despite
\ngovernment efforts to calm shaky markets.<\/p>\n
The won hit its daily lower limit of 1,565.9 to the dollar
\nwithin the first half hour of trade, down almost seven percent
\nfrom Tuesday's 1,460 close. Trading was suspended for the rest of
\nthe day.<\/p>\n
A Finance Ministry suspension of business at five merchant
\nbanks and worries about Seoul's ability to redeem short-term
\nforeign debt obligations precipitated the won's descent.<\/p>\n
Dealers scoffed at Finance Minister Lim Chang-yuel's package
\nof measures to stabilize the markets and draw in foreign funds,
\nfocusing instead on the suspension of the banks after last week's
\nclosure of nine merchant banks.<\/p>\n
\"The measure is just a peanut. Foreign investors are not
\nfools,\" said a foreign bank dealer in Seoul.<\/p>\n
The central Bank of Korea sold dollars in value-today and
\nvalue-tomorrow transactions in a desperate bid to prevent
\ncorporate defaults.<\/p>\n
The Taiwan dollar fell through the T$32 support level to the
\nU.S. dollar, ending at T$32.229 from Tuesday's T$31.963 close.<\/p>\n
Taipei dealers attributed the drop partly to active non-
\ndelivery forward buying of U.S. dollars by foreign fund managers
\nfollowing the Taiwan dollar's recent failure to extend its gains
\nsignificantly.<\/p>\n
But exporter U.S. dollar sales and fund inflows to the stock
\nmarket were expected to contain the Taiwan dollar's decline.<\/p>\n
The Hong Kong dollar hit a six-week low of 7.7450\/60 to the
\nU.S. dollar and forwards rose sharply in the face of short-
\nselling by overseas players.<\/p>\n
\"We're hearing there are a lot of European funds trying to get
\nout of the stock markets in Korea and Hong Kong,\" a said U.S.
\nbank dealer in Singapore.<\/p>\n
In Southeast Asia, the Indonesian rupiah remained in the
\nhotseat as players swooped on any mention of President Soeharto's
\nhealth in thin, easily-spooked year-end markets.<\/p>\n
The Malaysian ringgit fluctuated in a wide range but remained
\nlargely depressed by the plight of the won and rupiah.<\/p>\n
Talk of large dollar offers from agents of Bank Negara
\nMalaysia above the 3.6850\/6900 levels cushioned the ringgit's
\nfalls, but dealers said there was dollar buying interest around
\n3.6400.<\/p>\n
The Singapore dollar looked soft in the face of strong local
\nand offshore bids for the U.S. dollar below the 1.62 level.<\/p>\n
\"Technically, the market is looking at 1.63. The Singapore
\ndollar still has a long way to go compared with the others,
\nespecially the ringgit,\" said Ishak Ismail, market intelligence
\nanalyst at I.D.E.A.<\/p>\n
The Thai baht hovered around 42.10\/25 to the dollar in thin
\noffshore markets for most of the day. The onshore market was
\nclosed for the Constitution Day holiday.<\/p>\n
Dealers shrugged off comments by Deputy Prime Minister
\nSupachai Panitchpakdi that Thailand may consider lowering
\ninterest rates after the first quarter of 1998.<\/p>\n
The Philippine peso finished soft at 35.24 to the dollar
\nagainst a previous 35.105 after the central bank cut its
\novernight borrowing rate to 11 percent from 12 percent.<\/p>",
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