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.