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.