Asian currencies down late, rupiah at five month low on bombing
Asian currencies down late, rupiah at five month low on bombing
Nirmala Menon
Dow Jones
Singapore
The Indonesian rupiah crumbled to a five-month low Monday
after the weekend's fatal bomb attacks in Bali, which sent shock
waves through regional currency markets and roiled the local
stock market.
The incident, which killed at least 188 people, heightened
risk aversion in Asia and drove the Singapore dollar, the Thai
baht and the Philippine peso to levels unseen in several months.
The dollar closed at Rp 9,330 rupiah, up from Rp 9,010 Friday,
but off an intraday peak of Rp 9,350 after Bank Indonesia, the
central bank, intervened to stem the rupiah's slide.
Bank Indonesia said it will continue to monitor the rupiah and
will act if necessary to keep its level stable.
But the central bank may be hard-pressed to defend the
currency amid mounting security concerns.
Ratings agency Standard & Poor's said the bomb blasts could
hurt tourism, a major revenue earner for Indonesia. The agency
said the government will have to walk a fine line to win both
domestic and international support to regain confidence in the
country and its government.
Analysts see further downside to the rupiah going forward as
jitters over global terrorism prompt investors to shun this
region.
The U.S. investment bank, which had previously been upbeat
about Indonesia, last week revised its dollar/rupiah target to Rp
10,000 by year end, from Rp 8,700 previously.
Bank of America said any attempts by the government to clamp
down on terror groups could induce a further backlash from them
and dramatically increase domestic security risks.
"The perception of such risks is likely to damage Indonesia's
capability to attract much needed foreign capital and hurt its
already fragile economy," the bank said in a note.
In the Philippines, the incident in Bali spooked a market that
was already jittery after a bomb blast killed six people in the
southern Mindanao island Friday, traders said.
The dollar pierced the key 53-peso resistance to end at 53.030
peso on the Philippine Dealing System, its highest close since
Aug. 8, 2001, and up from 52.750 peso Friday.
Meanwhile, the U.S. currency bounced off early highs against
the Singapore dollar and was quoted around S$1.7986 late in Asia,
from S$1.7934 Friday.
In Thailand, dollar buying by local oil companies and
importers pushed the dollar up again to close the Asian session
at 44.02 baht, up from 43.875 baht Friday.
There was no sign of the central bank intervening during the
day as the baht's weakness was minimal compared with other
currencies, traders said.
Previous security incidents in Indonesia and Philippines have
resulted in tourists diverting their travel plans to Thailand,
which has a reputation for greater stability and less strife.
Elsewhere, the New Taiwan Dollar extended losses to close at a
fresh low since January 1987 as importers and interbank players
bought U.S. currency.
The U.S. dollar ended at NT$35.168, up from NT$35.157. Friday.
In South Korean the dollar ended at 1,259.3 won, slightly down
from 1,259.5 won Friday.