Asian monies mostly down, Rp peso at 2-month low
Asian monies mostly down, Rp peso at 2-month low
Ditas Lopez, Dow Jones, Manila
The Philippine peso ended at a two-month low on continued security and political concerns on Friday, while other Asian currencies were also mostly weaker against the dollar.
Short-dollar covering following a recent sell-off, and importer demand drove dealings across the region, but trading was muted by holidays in Asia, including Singapore and Malaysia.
The dollar ended at 55.330 peso, its highest level since closing at 55.450 peso on Aug. 26, and was up from 55.240 peso on Thursday. Volume declined to US$145.2 million from $236.5 million on Thursday.
Central bank deputy governor Amando Tetangco said the dollar's recent rally is partly due to corporate demand, particularly from firms covering their month-end debt payments and import requirements.
"The political noise isn't helping. It has been a cautious market," said Tetangco, who noted that banks were also buying dollars ahead of the May 2004 presidential elections. There are concerns of political and security instability in the months leading to the polls.
There have been renewed security concerns following reports that 30 members of the terror Jemaah Islamiyah group remain in the country.
Senior Philippine officials have been trying to calm the markets, and central bank governor Rafael Buenaventura added his voice on Friday, saying the peso should recover from its recent weakness toward the year end when remittances from overseas Filipino workers during Christmas should help support the local currency.
Indonesia's central bank also said on Friday it won't intervene to support the rupiah, which has weakened due mainly to dollar demand from corporates for month-end debt repayments.
The dollar ended at Rp 8,490, higher than Rp 8,475 on Thursday.
Apart from growing demand from local corporates, recent losses in the local equity market also pressured the rupiah.
"Some foreign investors sold shares and bought dollars," said a Jakarta trader.
The Korean won, meanwhile, fell over the day with market participants suspecting the government hand in the decline, weakening the won to boost exports and support the flagging economy.
The dollar climbed to 1,186.8 won before settling at 1,185.7 won, preferring to track the gains in non-deliverable forwards and its advance against the yen.
The U.S. unit closed at 1,184.4 won on Thursday.
Elsewhere, the New Taiwan dollar was weaker on importers' requirements, with interbank players mostly quiet, keeping trades relatively light. The U.S. dollar closed at NT$34.020, up from NT$33.975 a day earlier.
Bucking the regional trend was the Thai baht, which gained some ground on Friday after a local holiday on Thursday. The dollar was trading at 39.815 baht against Wednesday's close of 39.97 baht. Dollar demand from importers though limited the local unit's gains.
The Bank of Thailand on Friday said that recent limits imposed on outstanding balances of nonresident accounts with local financial institutions to curb speculation in the foreign exchange market had been effective.
The Singapore dollar also strengthened in offshore trading, with onshore markets closed for a public holiday. The U.S. dollar was quoted at S$1.7414 in late Asian trading, compared with S$1.7418 a day earlier.