Asian currencies maintain strenght on domestic factors

Asian currencies maintain strenght on domestic factors

SINGAPORE (Dow Jones): Most Asian currencies maintained their
recent strength late Monday on domestic factors, largely
unperturbed by the dollar's ascent against the yen and the euro,
dealers said.

The Indonesian rupiah ended higher Monday as state banks sold
dollars, possibly on behalf of the central bank.

Strong state bank dollar selling sparked talk that authorities
are hoping to push the rupiah higher this week as the market
waits for President Megawati Soekarnoputri to unveil her new
cabinet.

Delays in appointing the cabinet hurt market sentiment last
week, pushing the rupiah lower, but players are more cautious
this week amid the state bank dollar selling in a thin market.

The dollar moved to an intraday low at Rp 9,330 before
recovering to close at Rp 9,470, but still weaker than Rp 9,500
at Friday's close.

"The market is aware the state banks may sell dollars to help
the rupiah before Megawati announces the cabinet," said a dealer
at a Jakarta-based foreign bank.

At 0909 GMT (4.09 p.m. Jakarta time), the dollar was quoted at
123.91 yen, above 123.70 yen late Friday in New York. The euro
was at $0.8798, below $0.8835 late Friday in New York.

The Thai baht extended Friday's gains as Prime Minister
Thaksin Shinawatra's acquittal on charges of financial
impropriety lifted months of political uncertainty, and raised
hopes that it would allow the government to step up its fiscal
stimulus efforts, market watchers said.

The dollar was quoted at 45.410 baht, lower than 45.470 baht
late Friday. The dollar found some support around 45.300 baht on
corporate demand for the U.S. currency and with some foreign
banks looking to cover their short-dollar positions, dealers
said.

With the country's growing national debt and the economy on
the brink of recession, market watchers said the baht's reprieve
will likely be short-lived.

Fears the Philippine central bank might tighten foreign
exchange rules and monetary policy further to smother excessive
speculative trading against the peso, and to some extent
speculation of capital controls, bolstered the local currency
Monday, dealers said.

The dollar closed at 53.220 pesos on the Philippine Dealing
System, down from 53.450 pesos Friday.

The central bank over the weekend said it's considering
raising banks' liquidity reserve requirements by another two
percentage points to reduce excess peso liquidity that may be
used to speculate on the dollar.

Dollar bulls also turned skittish after President Gloria
Macapagal Arroyo reportedly said she didn't rule out the
possibility of taking drastic steps to curb excessive speculation
against the peso, including imposing capital controls as Malaysia
has done. Arroyo reiterated that the peso was fundamentally
valued near 50 pesos.

The South Korean won recouped its early yen-induced losses on
foreign equity fund inflows and exporter dollar sales, dealers
said.

The dollar ended at 1,286.2 won, down from Friday's close of
1,288.7 won.

The New Taiwan dollar, too, received a fillip from foreign
equity fund inflows and persistent exporter sales of the U.S.
currency, dealers said.

The central bank, however, bought around US$200 million
throughout the day, keeping a rein on the New Taiwan dollar's
appreciation, dealers said.

The U.S. dollar closed at NT$34.650, lower than NT$34.669
Friday.

Bucking the trend, the Singapore dollar lost ground as its
recent rally fizzled as the recent wave of long liquidation in
the U.S. currency subsided, and as U.S. investment houses turned
buyers of U.S. dollars, dealers said.

Against its U.S. counterpart, the Singapore dollar was at
S$1.7825, weaker compared with S$1.7768 late Friday.