Asian currencies close mixed late as rupiah ends lower
Asian currencies close mixed late as rupiah ends lower
SINGAPORE (Dow Jones): Most Asian currencies were weaker
Friday as investors expressed caution over political developments
and the pace of corporate restructuring in the region.
The Philippine peso was the exception, closing marginally
higher despite continued selling pressure.
Political turmoil is taking its toll on markets in Thailand,
Taiwan, Indonesia and the Philippines because it continues to
divert attention from necessary structural reforms, analysts
said.
The Indonesian rupiah closed lower Friday on dollar demand and
fears of rising social conflict after a blast in Jakarta.
The dollar closed at Rp 9,383 in Asia, up from Rp 9,348 late
Thursday.
The dollar fell to an intraday low of Rp 9,333 on dollar
selling by state banks, but rebounded to an intraday high of Rp
9,395 after news of an explosion in a hotel in central Jakarta
hit the market.
The U.S. currency retreated from its intraday high as the
explosion caused only minor damage, dealers said.
Elsewhere in the interbank money market, the overnight
interbank rate rose to 11.75 percent late Friday from 11 percent
Thursday as Bank Indonesia introduced a new "real time gross
settlement" system. Unfamiliarity with the new clearing system
made banks hold on to excess funds, dealers said.
"It's quite difficult to find rupiah funds in the money market
today," said a dealer. "There were no offers, all bids."
Bank Indonesia, however, claimed that clearing activities ran
smoothly Friday.
Taiwan and South Korea face additional pressure from investor
anxiety over the financial stability of debt laden companies, as
well as the recent selloff in technology stocks.
An overnight plunge in the technology-heavy Nasdaq Composite
Index dealt a blow to South Korean stocks and pushed the won to a
10-month low.
The dollar closed at 1,141.80 won, up from 1,138.30 won
Thursday. It was the dollar's highest close since Jan. 12, when
it ended at 1,144.50 won.
The Philippine peso edged higher, but remained at the weaker
end of its recent trading range as impeachment proceedings
against President Joseph Estrada progressed.
At the close of trading the dollar was quoted at 49.860 pesos,
down slightly from 49.890 pesos late Thursday.
Estrada's impeachment trial on corruption charges is scheduled
to begin in the Senate Dec. 1. Analysts said the market would
welcome an Estrada conviction, but added sentiment toward the
peso will remain bearish in the near-term due to the uncertainty
surrounding the outcome of the trial.
The Thai baht was dealt a double blow from uncertainty over
the upcoming general election and concerns over a delay in the
debt workout plan of Thai Petrochemical Industry.
Near the end of Asian trading the dollar was quoted at 44.605
baht, up from 43.865 baht late Thursday.
The New Taiwan dollar ended lower for the fourth straight
session. The U.S. dollar closed at NT$32.237, compared with
Thursday's close of NT$32.196.
Heightened worries about problem loans in the banking sector,
and ongoing concerns about the viability of President Chen Shui-
bian's administration, continue to weigh on the currency, DBS
Bank said in a research report.
The Singapore dollar surrendered its intraday gains to trade
lower against the U.S. dollar.
Late in Asian trading the dollar was quoted at S$1.7498, up
from S$1.7482 late Thursday.
Dealers said the currency's decline attracted local companies
to start buying U.S. dollars at around S$1.7465, which helped it
recover the bulk of its intraday losses.