Asian currencies up, rupiah shrugs off bad news
Asian currencies up, rupiah shrugs off bad news
Alan Yonan Jr., Dow Jones, Singapore
Asia's economic growth prospects continued to buoy regional
currencies at the expense of the dollar Wednesday.
Even the Indonesian rupiah managed to advance against the U.S.
currency, shrugging off a setback to the government's
privatization program.
The Philippine peso was the only currency that failed to
strengthen against the dollar, finishing the session unchanged.
In Jakarta, State Enterprises Minister Laksamana Sukardi said
the government had canceled the auction of its 51 percent stake
in PT Bank Niaga because the bids received were too low. The
government will now consider selling the bank through a private
placement, he said.
Rumors that the auction wasn't going well have been
circulating in the market in recent days, so Wednesday's
announcement didn't come as a surprise, dealers said.
Late in Asian trading the dollar was quoted at Rp8,840 rupiah,
down from Rp8,870 a day earlier.
There were four bidders on the short list for the mid-sized
bank, but in the end, only two submitted bids; Indonesia's PT
Bank Panin and Malaysia's Commerce Asset Holding Bhd. According
to talk in the market, the bids ranged from Rp15 to Rp25 per
share - well below the current market price of Rp75.
Investors nonetheless remain bullish on Indonesia's prospects,
with optimism being fueled by the country's economic growth
outlook, continuing political stability and successful efforts to
restructure its debt.
Gross domestic product grew by 2.5 percent in the first
quarter year-on-year, and private forecasters are looking for
full-year growth of 3.5 percent in 2002 and 4.5 percent in 2003.
The rupiah has appreciated by more than 17 percent against the
dollar so far this year, but many analysts say the euphoria
surrounding the Indonesian currency may have carried it a bit too
far. United Overseas Bank strategist in Singapore Jimmy Koh
expects the currency pair to begin trending back toward Rp9,000
in the near term.
The South Korean won continued to hover near a 17-month high
in a volatile day of trading.
South Korea is pegged to be the fastest growing economy in
Asia this year, and positive investor sentiment has contributed
to a nearly 8 percent rise in the won since early April.
The dollar slipped to an intraday low of 1,229.0 won in early
trading as exporters cautiously shed the U.S. currency for month-
end balancing of books.
But fears that the government might intervene to slow the
won's rise turned things around and the dollar quickly recovered
to post a daily high of 1,243.0 won. A few dealers said the
government's hand was behind the rise, but this couldn't be
confirmed.
Bank of Korea Governor Park Seung later said he wasn't worried
about the won's current level, which triggered a round of dollar
selling that pushed the U.S. currency down to 1,234.3 won at the
close, down from 1,237.5 won Tuesday.
The New Taiwan dollar finished at a new 11-month high on heavy
U.S. dollar selling by exporters.
The U.S. dollar ended at NT$34.239, compared with the previous
close of NT$34.309.
Shortly before the session ended, the central bank bought
about US$50 million to pull the U.S. currency off its intraday
low of NT$34.230.
The central bank intervenes in the currency markets regularly
to prevent the New Taiwan dollar from appreciating too rapidly.
The Philippine peso gave back its early gains to close
unchanged against the dollar. Banks squared off their short-
dollar positions a few minutes before the close of trading as the
U.S. unit recovered against regional currencies, traders said.
The dollar closed at 50.070 pesos on the Philippine Dealing
System.
A slowdown in remittances by overseas Filipino workers after
rising in April and early May also weighed on the peso.
The Singapore dollar strengthened slightly after trading in a
tight range.
Near the end of Asian trading the U.S. dollar was quoted at
S$1.7935, compared with S$1.7945 late Tuesday.
The U.S. currency opened around S$1.7928 in Asia and traded
between S$1.7930 and S$1.7940 through much of the session, with
market participants retaining a cautious tone in light of recent
intervention moves by central banks around the region to stem the
U.S. dollar's slide.
Against the Thai baht, the dollar was quoted at 42.500 baht in
late Asian trading, down from 42.626 baht a day earlier.
Thailand's improving growth outlook prompted the International
Monetary Fund this week to raise its forecast for the country's
gross domestic product growth in 2002 and 2003.
The IMF now forecasts 3.2 percent growth this year and 3.6
percent in 2003, up from earlier projections of 2.7 percent in
2002 and 3.5 percent in 2003.
After visits to Thailand over the past two weeks, the IMF said
higher consumer spending, improving exports in March and the
potential for more broad-based investment growth justified an
upward revision.