Asian currencies slip but rupiah rises

Asian currencies slip but rupiah rises

HONG KONG (Dow Jones)--Most Asian currencies ended local
trading Wednesday lower against the dollar, which was boosted by
Tuesday's 25-basis-point increase in U.S. interest rates.

However, both the Indonesian rupiah and the South Korean won
gained slightly on the day, in response to buying from offshore
investors.

The rupiah had initially fallen at the start of Asian trading,
as Indonesian President Abdurrahman Wahid's promise of a
referendum on the status of the North Sumatran province of Aceh
gave fresh the market fresh incentive to buy dollars.

Although the proposed vote won't take place for another seven
months, market participants are concerned that provincial demands
for independence may polarize the Jakarta government, diverting
its attention from the business of economic reconstruction.

However, the U.S. currency topped at Rp 7,100 as Hong Kong-
based participants emerged to buy the rupiah.

Saying the purchases appeared to be executed on behalf of
customers, one dealer at a U.S. bank in Singapore suggested that
the rupiah was being bought as one leg of a cross trade against
the Singapore dollar.

For weeks now, the Singapore market has buzzed with talk that
wealthy Indonesian Chinese are preparing to repatriate billions
of dollars in flight capital held outside the country, much of it
in Singapore.

Although many observers dismiss the talk as exaggerated, the
Singapore dollar did fall Wednesday, in response to heavy sales
from offshore participants.

Late in Asian dealing, the U.S. dollar was quoted against the
rupiah at Rp 6,995, down from Rp 7,010 the previous day.

Against the Singapore dollar, the U.S. currency rose to
S$1.6730 late in Asian hours from S$1.6690 the day before.

Despite the U.S. dollar's rise against the Singapore currency
Wednesday, dealers said the U.S. dollar had little room to make
further gains.

"Corporate selling is capping the (U.S. dollar's) top side" at
S$1.6730, said one trader at a Japanese bank in Singapore. "These
guys have been waiting all week to sell at these levels."

Expectations that data due for release Thursday in Singapore
will show strong 6.9 percent on year economic growth for the
third quarter period are also limiting the U.S. currency's
advance.

The Thai baht, too, lost ground Wednesday in response to what
one dealer described as a "huge amount" of dollar-buying by Thai
importers.

Toward the end of Asian trading, the U.S. dollar had risen to
38.8950 baht, up from 38.7050 baht the previous day.

Again traders said further dollar advances would be limited,
with the U.S. currency likely to meet heavy resistance at 39.2000
baht.

Customs Department figures showing that Thailand recorded a
$7.27 million trade surplus during the first 10 months of the
year helped damp dollar-buying enthusiasm.

The Philippine peso was sold off as the central bank confirmed
that it wasn't planning to follow the U.S. Federal Reserve and
raise interest rates.

By the close of trading in Manila, the U.S. dollar had risen
to 40.375 pesos, up from 40.260 pesos the day before.

Philippine Central Bank Governor Rafael Buenaventura called
the dollar's rise against the peso following the U.S. rate hike
an "overreaction" and reiterated his view that the U.S. currency
should be trading below 40.000 pesos.

The South Korean won ended little changed after buying from
foreign investors lifted the Korean currency off its intraday
lows.

Despite ongoing government efforts to prevent the won from
appreciating, most offshore observers remain bullish on the
currency's long-term prospects.

According to Bernhard Eschweiler, J.P. Morgan's head of Asia-
Pacific research, the won is likely to rise in 2000, with the
U.S. dollar falling towards 1,100 won by midyear. The economist
also predicted that Korean interest rates would rise by between
50 and 75 basis points.

At Wednesday's close, the U.S. dollar was quoted against the
won at 1,178.00 won, compared with 1,177.80 won the day before.

The New Taiwan dollar fell against its U.S. counterpart in
line with the yen Wednesday. The island's currency usually tracks
the yen's movements as Taiwan competes directly with Japan in
several export categories.

Against the New Taiwan dollar, the U.S. currency rose to
NT$31.758, up from NT$31.743.