Asian currencies mostly down late, rupiah hit by Tommy's case
Asian currencies mostly down late, rupiah hit by Tommy's case
SINGAPORE (Dow Jones): The New Taiwan dollar to a nine-month
low Wednesday, amid a generally weaker Asian currency market, as
Taipei's political quandary deepened following the prime
minister's abrupt resignation, dealers said.
Other Asian currencies also fell Wednesday, although the
Philippine peso which was pulled off a historic low by the
Central Bank to close slightly higher against the U.S. dollar.
The Indonesian rupiah closed lower after news President
Abdurrahman Wahid had turned down Tommy Soeharto's request for a
pardon.
Tommy was sentenced to 18 months' jail after the supreme court
convicted him on corruption charges last week.
Wahid rejected the clemency plea from the youngest son of
former President Soeharto on his return from a 10-day overseas
trip Wednesday.
The president's decision sparked a round of dollar buying on
fears pro-Soeharto demonstrators could clash with student groups
demanding the former dictator be put on trial.
The dollar closed at its intraday high of Rp 8,820 rupiah, up
sharply from Rp 8,730 late Tuesday.
Last week, a court decided to drop corruption charges against
Soeharto on the grounds he was unfit to stand trial.
The dismissal of the case led to running street battles
between pro- and anti-Soeharto elements.
Further fears of violence pushed players to cover short-dollar
positions, traders said.
But the dollar's rise should face stiff resistance at Rp
8,850, as many players feel any street violence is already priced
in at these lower rupiah levels.
The central bank raised rates marginally to 13.63 percent on
its one-month note Wednesday, saying this hike was required to
control inflation. Inflation, although still mild, has been
rising amid the rupiah's weakness, which has pushed up the cost
of imported goods.
Still, high political risks mean higher rates are unlikely to
attract back foreign capital, analysts say.
The U.S. dollar was at NT31.322, up from Tuesday's close of
NT$31.313.
Aggressive intervention by the central bank kept a rein on the
New Taiwan dollar's descent, but analysts said they have grown
more wary of the currency given the increased political risks on
the island state and heightened anxieties about cross-Strait
relations.
The Philippine peso moved into unchartered territory when it
fell to new record low earlier in the day, although aggressive
central bank intervention helped buoy the ailing currency toward
the close.
The dollar ended at 46.460 pesos on the Philippine Dealing
System, down from Tuesday's close of 46.465 pesos.
The peso had skidded to an all-time low of 46.610 pesos
earlier in the day, breaching its previous record low of 46.50
pesos, reached in January 1998 when the country was in the depths
of the Asian financial crisis.
The South Korean won sank after the government's structural
reforms suffered another setback. A U.S. investor consortium, led
by Nabors Industries Inc., decided to abort its planned $480
million purchase of insolvent Hanbo Iron & Steel Co. The move
comes at a time when the sale of ailing Daewoo Motor still hangs
in the balance, dealers said.
The dollar finished at 1,119.90 won, up from Monday's close of
1,118 won. Seoul financial markets were closed Tuesday for a
holiday.
In Thailand, political tensions ahead of general election,
expected later this year, pushed the local currency down to
42.595 baht against the dollar, from 42.335 baht late Tuesday.
Pressured by the slump in the region, the Singapore dollar
slipped to S$1.7482 against its U.S. counterpart, from S$1.7436
late Tuesday.