Asian currencies down late, rupiah hit by political turmoil

Asian currencies down late, rupiah hit by political turmoil

SINGAPORE (Dow Jones): Asian currencies weakened across the
board against the U.S. dollar Friday, with the deteriorating
political situation in Indonesia inflicting damage on the rupiah.

Indonesian President Abdurrahman Wahid, battling a campaign
effort by lawmakers to impeach him, would be firing his security
minister, national police chief, and three other senior members
of his cabinet, according to state-run news agency Antara.

Many market participants, fearful of holding long-rupiah
positions over the weekend, dumped the currency in favor of the
dollar, dealers said.

Late in Asian trading the dollar was trading at Rp 11,450, up
from Rp 11,065 late Thursday.

Reports of the supposed planned sacking overshadowed
supportive comments a top International Monetary Fund official
made earlier in the day about Indonesia's prospects for economic
recovery.

Rumors of a cabinet shakeup come amid heightened speculation
of a major rift between Wahid and his top advisors over his plans
to declare a state of emergency and dissolve the two main
legislatures before Aug. 1, when he is to face the start of
impeachment proceedings.

The Thai baht retreated as market players awaited details
Friday afternoon from the Bank of Thailand on reporting
requirements designed to improve the ability of the central bank
to monitor foreign exchange transactions.

Dealers in Singapore who trade the baht said the requirements,
to be implemented July 2, could significantly dampen trading
activity if they prove to be too onerous.

Late in Asia, the dollar was trading at 44.455 baht, up from
45.340 baht late Thursday.

The baht strengthened earlier in the week after Prime Minister
Thaksin Shinwatra fired central bank governor Chatu Mongol
Sonakul over a rift in monetary policy. The market pushed up the
baht on the view that Chatu Mongol's replacement would favor
higher interest rates.

Clashes between Philippine security forces and Muslim
extremists holding 20 hostages dented sentiment toward the peso
Friday.

The dollar closed at 50.750 pesos on the Philippine Dealing
System, up from 50.500 pesos Thursday.

Traders said some banks aggressively bought dollars as they
monitored developments in the kidnapping crisis.

The military said two soldiers were killed and at least 14
were injured in Friday's clashes.

The South Korean won weakened in lackluster trading, tracking
a late-session decline in the yen.

The dollar finished at 1,285.4 won, its intraday high, up from
Thursday's close of 1,282.7 won.

The won initially rose in sympathy with the yen's early-
morning strength around the Y118.50-per-dollar level. But market
participants were forced to cover their short-dollar positions
later in the day when the U.S. currency crept toward Y119.00.

The New Taiwan dollar lost ground as importers concerned about
the country's economic prospects bought U.S. dollars, dealers
said.

The U.S. dollar closed at NT$34.042, up from Thursday's
NT$33.965. Inflows of foreign funds were seen supporting the
local currency, helping it to recover from an early low of
NT$34.084.

The Singapore dollar weakened in thin, range-bound trading
ahead of the weekend.

Late in Asia, the U.S. dollar was quoted at S$1.8089, up from
S$1.8075 late Thursday.