Asian currencies pushed lower, rupiah ends flat in quiet trade
Asian currencies pushed lower, rupiah ends flat in quiet trade
SINGAPORE (Dow Jones): A slump in regional bourses and an
uncertain political climate in some countries late Monday cast a
pall over Asian currencies, pushing them lower, market watchers
said.
The currencies were, however, clamped in narrow trading bands,
with activity curtailed by the observance of Sports Day in Japan
and Columbus Day in the U.S., dealers said.
The Indonesian rupiah closed flat in lethargic dealing as
market participants deserted the market due to a public holiday
in the U.S.
After trading in a tight range of between Rp 8,810 and Rp
8,825, the dollar closed at Rp 8,812, little changed from its
close Friday.
Dealers, however, said that underlying sentiment remains weak
on the rupiah as a court dismissal last month of a corruption
case against former President Soeharto could still spark public
anger.
"On top of the political problem, demand for the dollar
seasonally increases during the last quarter of the year," said a
dealer with a foreign bank in Jakarta.
Year-end debt repayment and profit repatriation by units of
foreign companies in Indonesia usually boost dollar demand ahead
of the year-end.
In the shorter term, the market is waiting for the result of
an international lenders' meeting in Tokyo next week, during
which Indonesia will seek $4.8 billion of loans.
Indonesia is expected to face a tough time during the meeting
because of the killing of three United Nations relief workers in
West Timor last month, as well as the slow progress the
government has made to reform the economy.
Dealers expect the dollar to trade between Rp 8,790 and Rp
8,850 Tuesday.
A 3.2 percent plunge on Nasdaq Friday roiled the stock markets
in South Korea, Taiwan and Singapore Monday, in turn pressuring
their respective currencies, dealers said.
The South Korean won reacted with little cheer to an agreement
between General Motors Corp., Fiat SpA and Daewoo Motor Co.'s
creditors to proceed with sale talks for the ailing South Korean
automaker.
Market participants are awaiting the final deal before
rejoicing and are unwilling to react to developments on a
piecemeal basis, market watchers said.
"If successful, that could be good news for Korean financial
markets, but right now, the market seems conservative in
interpreting the news," said Suktae Oh, an economist at Salomon
Smith Barney/Citibank in Seoul.
Oh said the dollar will likely remain sandwiched in a "very
narrow range of 1,110 won to 1,120 won or 1,115 won to 1,125 won"
in the absence of any further surprises or shocks.
Against the won, the dollar finished at 1,117 won, up from
Friday's close of 1,116.20 won.
In Taiwan, a 2.3 percent slide on the Taipei bourse, keen
importer demand for the U.S. currency and persisting doubts over
the direction of the government's economic policy following last
week's cabinet reshuffle had dented the New Taiwan dollar,
dealers said.
However, intervention by Taiwan's central bank cushioned the
blow on the New Taiwan dollar, they added.
The U.S. dollar closed at NT$31.301, up slightly from the
previous close of NT$31.293.
Against the Singapore dollar, the U.S. currency rose to
S$1.7498 from S$1.7475 late Friday.
The Philippine currency once again weakened below the 46.50-
peso mark against the dollar, which was its previous record low,
amid concerns of allegations from an opposition lawmaker that
President Joseph Estrada and his family received kickbacks from
illegal gambling operations, dealers said.
The dollar was at 46.55 pesos, up from Friday's close of
46.395 pesos. The dollar had hit a record high of 46.610 pesos
last Wednesday.
The baht failed to be lifted by the Thai state rescue fund's
approval Monday of the terms of a deal to sell a 75 percent stake
in nationalized Bangkok Metropolitan Bank PCL to the UK's HSBC
Holdings PLC.
The dollar was at 42.585 baht, up from 42.235 baht late
Friday.