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.