Asian currencies mixed; central banks may have intervened

Asian currencies mixed; central banks may have intervened

SINGAPORE (Dow Jones): Asian currencies were mixed late
Thursday as gains on most of the regional bourses and the stable
yen mitigated jitters over Argentina's worsening crisis, dealers
said.

Suspected central bank interventions in the foreign exchange
markets of Singapore, Taiwan and the Philippines also helped the
currencies regain their footing, dealers said.

As such, the growing nervousness in emerging markets
everywhere over Argentina's possible failure to service its
US$130 billion in debt, necessitating a possible restructuring,
had a limited impact on Asian currencies, market watchers said.

The Indonesian rupiah closed almost flat against the U.S.
dollar as investors wait to see the outcome of President
Abdurrahman Wahid's impeachment in August.

The dollar closed at Rp 11,355, almost unchanged from Rp
11,350 Wednesday.

The Singapore dollar returned to the center stage after the
monetary authority caught the market off-guard with its
announcement that it has since July 1 shifted its policy bias to
neutral, from a moderately tightening stance.

"Against the backdrop of a weaker external economic
environment and a more protracted global electronics downturn,
near-term growth prospects for the Singapore economy have turned
significantly weaker while inflationary pressures are subsiding,"
said Tharman Shanmugaratnam, managing director of the Monetary
Authority of Singapore.

"MAS has therefore shifted to a neutral exchange rate policy
stance, with a policy band centered on a zero percent
appreciation" of the trade-weighted Singapore dollar, he added.

In a knee-jerk reaction, the Singapore dollar plummeted to yet
another 11-year low of S$1.8398 against the U.S. currency, as
most participants had expected the central bank to reaffirm its
moderately tightening policy stance, dealers said.

In explaining the Singapore dollar's swift rebound to
S$1.8340, dealers said the MAS sold the U.S. currency
aggressively to defend the local dollar.

At 0905 GMT (4.05 p.m. Jakarta time), the U.S. dollar was
quoted at S$1.8353, higher than S$1.8345 late Wednesday.

The Philippine peso closed at its weakest level since
President Gloria Macapagal Arroyo took over the helm of the
country's leadership in late January, although suspected central
bank intervention had narrowed its losses, dealers said.

The dollar had risen to as high as 53.400 pesos earlier in the
day, but subsequently retreated to close at 53.080 pesos,
marginally higher than 53.065 pesos Wednesday.

Some traders believed the central bank sold around $50 million
when the dollar traded between 53.25 pesos and 53.35 pesos. The
central bank declined to comment on the suspected intervention.
Volume surged to $119 million from $76.7 million Wednesday.

A 1.9 percent jump on the Taipei bourse and U.S. dollar sales
by the central bank helped the New Taiwan dollar recover from its
weakest close Wednesday in almost 15 years, dealers said.

The U.S. dollar closed at NT$34.976, down from Wednesday's
close of NT$35.050. Dealings were valued at US$525 million.

The central bank sold an estimated $300 million in the foreign
exchange market Thursday to smooth the local dollar's volatility,
dealers said.

In Korea, the dollar finished at 1,300.7 won, down from
Wednesday's close of 1,308.8 won, as the benchmark stock index
rose 1.1 percent.

The Thai currency extended its recent gradual descent to
45.625 baht per dollar, from 45.545 baht late Wednesday, dragged
by the Singapore dollar's earlier fall, dealers said.