Asian currency markets make slight gains in thin trade

Asian currency markets make slight gains in thin trade

HONG KONG (Dow Jones): Asian currency markets remained
rangebound, with Japan on holiday and traders elsewhere now
scaling back their exposure ahead of the year's end.

In North Asia both the Korean won and the new Taiwan dollar
made moderate advances, their gains limited by government action
to preserve exchange rate competitiveness.

News from Indonesia that the government of President
Abdurrahman Wahid is seeking to negotiate a fresh assistance
program with the International Monetary Fund to replace the
existing funding package had little impact on trading in the
rupiah.

Dealers in Singapore reported some interest in buying dollars
against the Indonesian currency from offshore market players
seeking to cover short dollar positions.

The U.S. currency failed to move appreciably higher, however,
as the buying pressure was offset by dollar offers, attributed by
some traders to the repatriation of flight capital following
Indonesia's presidential election.

Towards the end of Asian interbank trading, the dollar was
being quoted at Rp 6,735, scarcely changed from Rp 6,730 a day
earlier.

The Singapore dollar too ended Asian trading little changed.
After ticking up to a high of S$1.6730 in early trading, the U.S.
dollar later eased back to test an intraday low at S$1.6680.

"You can see from the way the prices are moving up, and then
down again that the market liquidity is not there as it was
before. A lot of people are winding down their operations ahead
of Y2K," according to the regional currencies' trader at one
European bank in Singapore.

Late in Asian dealing, the U.S. currency was quoted at
S$1.6682, up just a fraction from S$1.6670 the previous day.

Trading in the baht was similarly lackluster, as the market
ignored the rumbling scandal centered on Krung Thai Bank.

Throughout the day the U.S. dollar remained confined in a
range between 38.60 baht and 38.80 baht, ending Asian dealing
hours at 38.7100 baht, down from 38.8685 baht the day before.

In Manila the Philippine peso strengthened slightly as the
local market reopened following a two-day holiday.

A broadly positive report on the Philippine economy from
credit ratings agency Duff & Phelps helped bolster sentiment
toward the local currency, but the U.S. dollar remained well
supported above the 40.00 pesos.

At the close, the U.S. dollar was quoted against the peso at
40.120 pesos, down from 40.210 pesos last Friday.

Foreign portfolio inflows into Korean stocks approaching $200
million in value boosted the won to its highest level in seven
weeks Wednesday as market confidence grew that the government
will successfully avert a systemic crisis triggered by the
financial collapse of the Daewoo Group.

As in previous days, however, the extent of the local
currency's appreciation was limited by dollar purchases executed
by Korea's state-run banks.

By the local close the U.S. dollar had dropped to 1,191.90
won, down from 1,193.30 won the day before.

Government U.S. dollar purchases also held back the New Taiwan
dollar, countering the upward pressure on the currency exerted by
positive trade and investment flows.

Figures showing that Taiwan's foreign exchange reserves hit a
record high of $102.7 billion at the end of October, up from
$101.7 billion the previous month illustrated the lengths to
which the Taiwanese authorities have gone to recently to damp the
local currency's appreciation as it approaches two-year highs.

At the close the U.S. dollar was quoted at NT$31.722, down
from NT$31.728 at the end of Tuesday's session.