Asian currencies lower in quiet trade
Asian currencies lower in quiet trade
SINGAPORE (Reuters): Asian currencies closed a quiet day's
trade yesterday drifting lower as the end of the fiscal year for
many companies approached, while most traders awaited fresh
developments from Indonesia's talks with the International
Monetary Fund.
Dealers also said they feared that regional currencies, which
have fared well against the dollar in recent weeks, might have
trouble extending their gains in the face of expected corporate
dollar demand for hedging purposes after April 1.
"Additional downside room for the U.S. dollar against the
Asian currencies is limited, and the risk is towards a broad
consolidation for the Asian currencies in Q2," said Thio Chin
Loo, strategist at Banque Paribas in Singapore.
The Indonesian rupiah was slightly lower on dollar buying from
Indonesians, including state banks, possibly to cover maturing
forward contracts.
But its falls were countered by offshore buying as the market
awaited the outcome of talks between Indonesia and the IMF.
Over the weekend Coordinating Minister fir Economy, Finance
and Industry Ginandjar Kartasasmita said Indonesia was close to
concluding talks on a package to resolve its financial crisis,
but the issue of its $74 billion of private debt remained a
sticking point.
Finance Minister Fuad Bawazier was more upbeat on Monday,
saying there were positive signs the debt problem could be
settled, but he did not provide any details.
Dealers in Singapore said the IMF package could be announced
as early Wednesday of this week.
Elsewhere, the Thai baht shed some of its overnight gains but
held up on foreign inflows for investment in short-term
commercial paper.
Thailand's efforts at economic reform continued to win market
approval and traders said the baht's rise in New York trade above
the technical barrier of 38 to the dollar had put it on track for
the 35 level.
Thai Deputy Finance Minister Pisit Lee-atham said the baht was
now trading at an appropriate level after firming to 37.95 at one
point on Monday against 38.40 on Friday.
But according to a Reuters poll, the baht is expected to
weaken in the next three months as its recent surge is not
matched by fundamentals.
The poll of 10 regional dealers and analysts produced an
average forecast of 39.70 baht to the dollar in three months.
The Thai central bank is due to unveil tougher bank loan
criteria and provisioning standards by Tuesday, in line with
reforms tied to an IMF loan package.
The Philippine peso gained from dollar inflows to the stock
market on the first trading day after the country's graduation
from an IMF program, but traders said it was facing some
resistance at the 37.00 level.
The Malaysian ringgit was confined to a narrow range as
corporate dollar demand below the 3.55 level blocked its rise.
The Singapore dollar hovered around 1.5900 to the dollar after
running up against apparent central bank intervention to curb its
rise near 1.5850 late on Friday.
The South Korean won softened on dollar short-covering after
Finance Minister Lee Kyu-sung said he believed the economy would
contract by between 0.2 and 0.8 percent in 1998.