Won rise continues despite govt threat, rupiah slips<\/p>\n
HONG KONG (Dow Jones): The Korean won rose Monday to its
\nhighest level since late November 1997 despite verbal
\nintervention from the finance ministry, dollar purchases executed
\nby state-run Korea Development Bank and reported direct
\nintervention from the central bank.<\/p>\n
Most other Asian currencies also gained, but the Indonesian
\nrupiah slipped back as political tensions in Jakarta and unrest
\nin the provinces continued to unnerve market participants.<\/p>\n
The rupiah weakened as players shunned the market, deterred by
\nweekend talk of a possible military coup, firmly dismissed by
\nIndonesian President Abdurrahman Wahid, and news of fresh
\nreligious violence in the country's provinces.<\/p>\n
Towards the end of Asian dealing Monday, the dollar was quoted
\nRp 7,278, up from Rp 7,210 Friday.<\/p>\n
The won's rise followed its rapid appreciation Friday after
\nnewly-appointed Finance and Economy Minister Lee Hun-jai
\nindicated that in future the government would be less inclined to
\nintervene in the market to slow the currency's rise.<\/p>\n
Heavy won-buying by offshore financial institutions was
\ncredited as the main force driving the won sharply higher Monday.<\/p>\n
Early trading saw the dollar pushed down steeply to an
\nintraday low of 1,116.00 won, its lowest against the Korean
\ncurrency since Nov. 27, 1997.<\/p>\n
The speed of the won's run-up prompted the Finance and Economy
\nMinistry in Seoul to issue a statement declaring the won's rise
\nwasn't desirable for the country's economic recovery, especially
\nin the light of the yen's recent fall against the dollar.<\/p>\n
The ministry's implied threat, backed by dollar purchases from
\nKorea Development Bank and reports that Bank of Korea itself had
\nbeen in the market, triggered a flurry of short-covering which
\npropelled the dollar back above its opening level.<\/p>\n
But by the close of the local market, the won's natural
\nbuoyancy had reasserted itself and the dollar had sunk to
\n1,121.00 won, down from 1,124.80 won at the end of Friday's
\nsession.<\/p>\n
Despite Monday's official action to take some of the steam out
\nof the won's rise, most market participants remain strongly
\nbullish on the currency's prospects.<\/p>\n
With a current account surplus projected at $12 billion for
\n2000, strong inward portfolio and direct investment flows, and a
\nrelatively tight monetary policy stance aimed at curbing domestic
\ninflation, most South Korea watchers see the won strengthening by
\n10 percent or more over the year.<\/p>\n
Barclays Capital, for example, is recommending short positions
\nin the dollar against the won targeting an exchange rate of 1,050
\nwon over a three month time horizon. Barclays also believes the
\nwon will appreciate against the yen, with the Japanese currency
\nsliding to 10.00 won from around 10.70 won currently.<\/p>\n
Most other regional currencies also strengthened Monday.<\/p>\n
The New Taiwan dollar edged higher on continued healthy
\ninflows of portfolio investment capital despite central bank
\npurchases of U.S. dollars. At the close the U.S. dollar was
\nquoted at NT$30.835, down from NT$30.845 Saturday.<\/p>\n
In Southeast Asia the Thai baht inched upwards on generally
\npositive market sentiment, which also helped lift the Philippine
\npeso.<\/p>\n
Towards the end of Asian trading the dollar was quoted against
\nthe baht at 37.435 baht, down from 37.495 baht Friday.<\/p>\n
In Manila the dollar slipped to close at 40.564 pesos, down
\nfrom 40.585 pesos Friday.<\/p>\n
The Singapore dollar slipped back, shadowing the fall of the
\nlocal stock market, prompting talk that international investment
\nfunds were allocating assets away from the safe haven of
\nSingapore to other regional markets following the new year.<\/p>\n
Late in Asia, the U.S. dollar was quoted against the Singapore
\ncurrency at S$1.6741, up marginally from S$1.6730 late Friday.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/won-rise-continues-despite-govt-threat-rupiah-slips-1447893297",
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