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.