Asian currencies declining, S'pore dollar at new 11-year low
Asian currencies declining, S'pore dollar at new 11-year low
SINGAPORE (Dow Jones): Asian currencies suffered another hemorrhage late Tuesday as poor economic data from Singapore and Taiwan underscored the severity of the region's malaise, dealers said.
The Singapore dollar extended its descent to 11-year lows after the government's advanced estimate on second-quarter gross domestic product came in worse than economists had expected, even though the market had braced itself for a recession.
Singapore's economic data, the first second-quarter GDP numbers to be issued in Asia, was symptomatic of the region's ills and a harbinger of more gloom in the coming quarter.
Advance, or flash, estimates issued Tuesday show Singapore's economy contracted an annualized 10.1 percent in the second quarter from the first quarter. With a 11.3 percent annualized quarter-on-quarter drop in the January-March period, Singapore meets the conventional definition of a recession - two back-to- back quarters of economic contraction on a quarter-on-quarter basis.
Market participants expect the government to provide hints on an expected stimulus package to help resuscitate the economy when Parliament meets Thursday.
In the absence of intervention by the Monetary Authority of Singapore, the U.S. currency climbed to a new 11-year high of S$1.8373 at 0920 GMT (4:20 p.m. Jakarta time), up about 0.5 percent from S$1.8289 late Monday.
"The Singapore dollar's fall reflects its fundamentals," said a senior dealer at a European bank. "There's nothing the MAS can do."
Most economists expect the MAS to reaffirm its policy of allowing a gradual, modest appreciation of the Singapore dollar against the currencies of its major trading partners and key competitors, when it announces the results of its biannual policy review Thursday.
Meanwhile, the Indonesian rupiah closed slightly lower in thin trade as local companies bought dollars to pay maturing offshore debts, dealers said.
The dollar closed at Rp 11,355, slightly up from Rp 11,335 Monday.
Dealers said trading was driven by pure demand and supply, and that fresh incentives were lacking, ahead of President Abdurrahman Wahid's impeachment in next month.
Wahid, on Monday, threatened again to impose a state of emergency and shut down parliament if it refuses to drop its impeachment attempt by July 20.
Elsewhere, the Thai baht and the Philippine peso felt the ripples of the Singapore dollar's fall, dealers said.
The U.S. dollar was quoted at 45.460 baht, higher than 45.435 baht late Monday.
On the Philippine Dealing System, the dollar closed at its intraday high of 52.950 pesos, up from 52.835 pesos Monday.
The New Taiwan dollar closed at a 34-month low as the island state's second-quarter exports and imports posted their sharpest fall in 25 years, which in turn pushed the benchmark stock index to a new closing year-low, dealers said.
Taiwan's Ministry of Finance said Tuesday, that exports in June slipped 16.6 percent on the year to US$10.3 billion.
Taiwan's second-quarter exports and imports fell 17 percent and 22.8 percent, respectively - the largest quarterly declines since 1976.
The U.S. dollar ended at NT$34.656, its highest closing level against the local currency since early September 1998, compared with Monday's close of NT$34.545.
Pressured by the currencies of Taiwan and Singapore, the South Korean won ended at 1,299.0 won to the dollar, weaker compared with Monday's close of 1,296.4 won.