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.