Asian monies flat as dealing slows for start of Ramadhan

Asian monies flat as dealing slows for start of Ramadhan

HONG KONG (Dow Jones): Dealing in Asian currencies ground to a halt Friday as traders and investors closed their books at the start of Ramadhan and in the approach of the New Year.

Only the South Korean won moved significantly, dropping rapidly against the U.S. dollar at the start of trading in Seoul, before activity there tailed off, too, and the currency moved sideways for the remainder of the session.

Other regional currencies hardly budged, with those traders still at their desks universally complaining at how quiet the markets were.

Some observers, however, interpreted the hush in Asian markets as a broadly positive sign.

"The recent stability in regional currencies shows the market is optimistic on the longer term outlook and it's only the Y2K problem that's stopping investors rushing in now," said Steven Brice, treasury economist at Standard Chartered Bank in Singapore.

Few investors are prepared to take positions in Asian currencies except the Singapore dollar and Hong Kong dollar ahead of the new year. But any knee-jerk dips in other regional currencies caused by year 2000 problems are likely to be taken as buying opportunities by foreign investors, whom Brice expects to move assets back into Asian markets in the first quarter, if the millennium fallout is not too severe.

That wait-and-see approach kept Southeast Asian currencies tightly range-bound Friday, with the Singapore dollar, Indonesian rupiah, Thai baht and Philippine peso barely moving.

The announcement early Friday that the Korean finance ministry is to issue 1 trillion won in won stabilization bonds to fund foreign exchange market intervention Monday helped damp sentiment toward the South Korean won.

Since the won hit a two-year high Wednesday, with the U.S. dollar falling to 1,126 won, the Seoul authorities have stepped up efforts to prop up the U.S. currency, in order to safeguard the competitiveness of South Korea's exports.

Heavy dollar-buying by the state-controlled Korea Development Bank further lifted the U.S. currency at the start of Friday's trading.

At the close, the dollar was quoted at 1,132.80 won, up from 1,130.10 won the day before.

Against the New Taiwan dollar, the U.S. currency closed at NT$31.618, up marginally from NT$31.616 the previous day.

In Southeast Asia, the Singapore dollar ended Asian hours little changed. Late in the day, the U.S. currency was at S$1.6780, down a touch from S$1.6808 Thursday.

Against the rupiah, the dollar eased fractionally to Rp 7,220, from Rp 7,235 late the day before.

In Manila, the U.S. currency closed against the Philippine peso at 40.710 pesos, unchanged from the day before.

With markets in Bangkok closed for a holiday, the baht was scarcely traded in the offshore market. Late in Asia the dollar was quoted against the Thai currency at 38.6100 baht, compared with 38.6550 baht the previous day.