Asian monies pare loss, SARS to buoy economies

Asian monies pare loss, SARS to buoy economies

Bloomberg, Singapore

Asian currencies pared losses on trader speculation the
containment of the deadly SARS virus, which had prompted
governments to slash growth forecasts and consumers to
hold back on spending, will buoy economies.

The Singapore dollar was little changed at S$1.7308 against
its U.S. counterpart after falling as much as 0.4 percent. The
Thai baht held at 41.72 after sliding 0.3 percent, according to
Bloomberg data. The regional currencies had fallen after U.S.
President George W. Bush said he supports a "strong dollar".

The World Health Organization last week removed Singapore
from its watch list for SARS-affected areas. Taiwan, which has the
world's third-highest number of infections, reported four more
cases of the disease, its fewest in almost a month.

"The worst is over for Asia in the sense that SARS has got
better, so for the dollar to rally significantly in Asia is quite
difficult," said Peter Soh, managing director of spot foreign
exchange at DBS Group Holdings Ltd., Southeast Asia's biggest
bank.

The South Korean won was little changed at 1,205.40 won after
sliding as far as 1,210 won, according to Seoul Money Brokerage
Services Ltd. The Philippine peso held at 53.25 peso. It was as
weak as 53.34 peso, according to the Bankers Association of the
Philippines.

The Taiwan dollar was at NT$34.699 from Friday's NT$34.712.

Overseas demand for Asian stocks also benefited regional
currencies.

Money managers outside Thailand bought a net 4.6 billion baht
of stocks last week, more than double the amount from the previous
week.

Offshore investors have purchased a net $563 million of South
Korean stocks since May 28. These fund managers snapped up NT$34
billion of Taiwan's stocks last week, compared with NT$7 billion
the week before.

In Indonesia, the rupiah rose 0.2 percent to Rp 8,295 as
Coordinating Minister for Economic Affairs Dorodjatun Kuntjoro-
Jakti said the government's target of 4 percent economic growth
this year is achievable.

The currency may strengthen to Rp 8,250 this week, said
Benjamin Widjaja, a treasury and foreign exchange trader at PT
Bank Mizuho Indonesia.

Kuntjoro-Jakti also said the currency's 8 percent gain this
year is "a bit of a concern". Currency gains erode the profits a
nation's exporters earn on overseas sales. The comment fell short
of what's needed to derail the rally, analysts said.

"Domestic factors in Indonesia are still good," said Jan
Lambregts, head of Asia Pacific research at Rabobank International
in Singapore. "I do not get the impression that they're
uncomfortable with a slowly appreciating rupiah." The rupiah may
rise to Rp 8,000 in one to two months, Lambregts said.