Asian currencies mostly down; new Taiwan dollar low
Asian currencies mostly down; new Taiwan dollar low
SINGAPORE (Dow Jones): Most Asian currencies fell late Monday
amid nagging political and economic uncertainties, with the New
Taiwan dollar falling to a 31-month low after an influential
think tank called for a much weaker currency, dealers said.
A spike in global oil prices, following increased Israeli-
Palestinian violence over the weekend, also cast a shadow on most
Asian foreign exchange markets, dealers said.
Expensive oil prices would hurt oil importers like South
Korea, Taiwan, Thailand, the Philippines and Singapore. As net
oil exporters, Indonesia and Malaysia stand to gain.
The first step by Morgan Stanley Capital International to
adopting a free-float system for calculating its indexes
contained a few surprises, and having largely been priced in the
region's equity markets, the changes had little immediate impact
on Asian currency markets, dealers said. The final rebalancing
and full adoption of the free-float system won't be until May 31,
2002.
The Indonesian rupiah ended lower against the U.S. dollar
Monday as the country's political crisis rolled on, traders said.
The dollar closed at the day's low of Rp 11,450, higher than
its close Friday at Rp 11,375.
The U.S. currency hit an intraday high of Rp 11,550 on rumors
President Abdurrahman Wahid plans to move to dissolve Parliament
to stop lawmakers from impeaching him.
Standard & Poor's, a credit ratings agency, lowered
Indonesia's long-term foreign currency rating to CCC+ from B-,
citing the political situation as a main reason for the
downgrade.
But the market didn't move on the news, as the reasons for the
downgrade are already well known, analysts said.
Dealers put most of the blame for the New Taiwan dollar's
plunge to a local newspaper report over the weekend that a
private think tank - the Taiwan Research Institute - had
suggested the government let the currency weaken to NT$40.000 to
help stabilize the economy.
Speculation that the government may allow a sharp depreciation
of the currency snapped the New Taiwan dollar out of its recent
inertia, and dragged it to its weakest level since October 1998.
The U.S. dollar closed at NT$33.456, higher than NT$32.948
Friday. Dealings were valued at US$878 million, up from US$293.5
million Friday.
Talk of a possible sharp depreciation in the New Taiwan dollar
stung some of the other regional currencies, like the Philippine
peso and the Thai baht, dealers said.
The dollar closed at 50.840 pesos on the Philippine Dealing
System, up from 50.330 pesos Friday.
Speculation that the Philippine central bank was buying
dollars to service its debt requirements also pressured the peso,
dealers said.
The Thai currency weakened to 45.630 baht per dollar, compared
with 45.490 baht late Friday.
The Singapore dollar relinquished its earlier gains following
news that independent directors of Australia's Cable & Wireless
Optus Ltd. had recommended shareholders accept the friendly
takeover bid from Singapore Telecommunications Ltd.
Fears of intervention by the Monetary Authority of Singapore
cushioned the local currency's decline, dealers said.
The U.S. dollar was at S$1.8113, up from S$1.8075 late Friday.
Following gains in New York Friday, the U.S. dollar had opened
around S$1.8120.
Resisting the pressure from the region, the South Korean won
found respite from a 3.1 percent surge on the local stock market.
The dollar finished at 1,301.5 won, lower than Friday's close
of 1,304 won.