Asian currencies gain on fears of Thai forex ruling
Asian currencies gain on fears of Thai forex ruling
SINGAPORE (Dow Jones): The Japanese yen's vigor and Thailand's
move to tighten disclosure requirements in foreign exchange
dealings bolstered several Asian currencies late Wednesday,
dealers said.
The Indonesian rupiah closed flat Wednesday as offshore
players remained out of the market on political concerns.
Fears that President Abdurrahman Wahid is losing his grip on
power after Parliament censured him last month in connection with
two financial scandals is hurting sentiment.
"It like a time bomb and nobody wants to go short-dollar," a
trader said.
The dollar ended Asian trading at 9,590 rupiah, unchanged from
Tuesday's close. The dollar moved in a very tight range between
Rp 9,590 and Rp 9,600 during the day.
Trading rules which ban the transfer of rupiah offshore have
also killed speculative activity against the rupiah from foreign
banks, traders said.
Local companies are also out of the market while they wait for
the outcome of political developments.
The South Korean won, the Thai baht and the Singapore dollar
were slightly firmer, and the Philippine peso and the New Taiwan
dollar were weaker.
Federal Reserve Chairman Alan Greenspan's relatively more
upbeat assessment of the U.S. economy Tuesday provided some
relief for some currencies, like the Singapore dollar and the
won, whose export-dependent economies are highly dependent on the
U.S.
Greenspan's comments, however, didn't change expectations that
the Fed will cut interest rates again at its March 20 policy-
setting meeting, although some participants have lowered their
forecasts for an aggressive easing.
The baht took centerstage, as offshore participants, led by
U.S. investment houses, bailed out of their long-dollar
positions. Bank of Thailand's move to standardize, and make more
stringent, reporting formats of foreign exchange dealings by
onshore banks had sparked fears - among some - that this could be
a precursor to some form of foreign exchange curbs, dealers said.
"They just want to tighten up the disclosure requirements
between onshore and offshore counterparties," said Mansoor Mohi-
uddin, a regional currency strategist at UBS Warburg. "We don't
think they're following Indonesia's footsteps and completely
banning the offshore market."
The dollar fell to 42.370 baht, from 42.400 baht late Tuesday.
Onshore corporate dollar demand cushioned the U.S. currency's
decline, dealers said.
The central bank will hold a meeting Friday with commercial
bank treasurers to explain the new disclosure requirements, which
have perplexed dealers.
"I don't expect anything to come out of this, but nobody wants
to be long and get caught high and dry," said a dealer at a
European bank.
The yen's gains kept the Singapore dollar and the Korean won
buoyed, dealers said. Local media reports that a top coalition
politician had called for Japanese Prime Minister Yoshiro Mori to
step down as premier supported the yen.
At 0950 GMT (4:50 a.m. EST), the dollar was quoted at Y116.58,
below Y116.72 late Tuesday in New York. The dollar was at Y117.12
a day earlier in Tokyo.
The Singapore dollar was at S$1.7450 against its U.S.
counterpart, down slightly from S$1.7453 late Tuesday.
In Seoul, the dollar closed at 1,252.3 won, compared with
Tuesday's close of 1,255.0 won. Foreign equity fund inflows into
the Seoul bourse contributed to the dollar's decline, dealers
said.
Against the New Taiwan dollar, the U.S. currency closed at
NT$32.387, up from NT$32.334 Tuesday.
The dollar closed at 47.955 peso on the Philippine Dealing
System, up from 47.630 peso Tuesday.