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.