Asian monies reach year highs

Asian monies reach year highs

Alan Yonan Jr., Dow Jones, Singapore

Asian currencies surged against the dollar Friday - some to their highest levels in more than a year - as improving prospects for economic recovery continued to stir investors' interest in the region.

The South Korean won and Thai baht strengthened to 15-month highs, while the Philippine peso posted its best performance against the dollar in 14 months.

The Indonesian rupiah hit an eight-month high, the Singapore dollar a seven-month high and the New Taiwan dollar a five-month high.

"We're starting to see good growth and export numbers from Asia. Current account surpluses are rising and countries are attracting portfolio inflows as well as foreign direct investment," said Thio Chin Loo, senior currency strategist at BNP Paribas in Singapore.

Greater tolerance for risk has whetted investor's appetites for emerging market assets, particularly those in Asia, she said.

The yen's strength also set a firmer tone for Asian currencies, dealers said.

Authorities in South Korea attempted to curb the won's rise with verbal intervention.

The Ministry of Finance and Economy issued a statement saying it was concerned about the dollar's sharp fall against the won and would take action if warranted.

The dollar rose slightly after the statement, but resumed its slide when the ministry didn't act on its warning.

The limited impact from the government's statement was also due in part to seemingly contradictory remarks from Finance Minister Jeon Yun-churl, made at almost the same time.

Jeon said that dollar/won exchange rate reflects the health of South Korea's economy, which traders interpreted to mean the government was comfortable with the won's strength.

The dollar closed at 1,261.6 won, down from Thursday's close at 1,269.8 won. Friday's close marked the won's strongest finish against the dollar since March 1, 2001.

Rising regional currencies and recent upbeat comments from the government regarding Thailand's export prospects underpinned the baht.

Near the end of Asian trading, the dollar was quoted at 42.740 baht, down from 42.845 baht late Thursday. It was the baht's best close since Feb. 20, 2001.

The peso got swept up in the euphoria driving other regional currencies.The U.S. dollar closed at 49.46 pesos on the Philippine Dealing System, down from 49.52 pesos Thursday. It was the peso's strongest finish since March 29,2001.

The peso also was supported by remittance inflows from overseas Filipino workers and thin corporate demand for the U.S. dollar.

There was talk in the market that the central bank took advantage of the cheap U.S. currency to buy about US$30 million to boost its reserves, which helped contain the peso's rise.

The Indonesian rupiah was buoyed by gains in its regional peers and continued optimism over the government's privatization program.

Late in Asia the U.S. dollar was quoted at Rp 9,080 rupiah, down from Rp 9,150 late Thursday. It was the rupiah's best showing since Sept. 14, 2001.

Still, the rupiah was unable to seriously test key resistance at Rp 9,000 to the U.S. dollar as local companies that owe debt overseas picked up the U.S. currency at the lower levels.

The Singapore dollar was helped by strong economic data and comments from the Monetary Authority of Singapore that it's comfortable with the currency's current level against the U.S. dollar.

Near the end of Asian trading the U.S. dollar was quoted at S$1.7950, down from S$1.8024 late Thursday. It was the Singapore dollar's strongest performance since Oct. 5, 2001.

The government reported that non-oil domestic exports rose a surprising 6.4 percent on year, the first increase after 13 consecutive months of decline.

MAS Assistant Managing Director Khor Hoe Ee told reporters that the trade-weighted Singapore dollar is still within the central bank's undisclosed policy band, "and we are comfortable with it."

Foreign funds flowing into Taiwan from the recent sale of $700 million worth of convertible bonds by Cathay Financial Holding helped lift the local currency.

The U.S. dollar ended at NT$34.458, down from NT$34.538 Thursday.

It was its strongest close for the New Taiwan dollar since Dec. 12, 2001.