Asian monies tumble late, rupiah casts pall over region

Asian monies tumble late, rupiah casts pall over region

SINGAPORE (Dow Jones): The foundering Indonesian rupiah Monday
cast a pall over regional Asian currencies already under pressure
from what analysts say is an impending hike in U.S. interest
rates later this week.

The rupiah has taken a pummeling in recent weeks amid growing
investor skepticism about the Indonesian government's ability to
push ahead with reforms and keep the economic recovery on track.

President Abdurrahman Wahid said Monday he had no plan of
action to keep the currency from falling further, but added he
would be discussing the situation with his economic ministers in
the coming days if the weakness persists.

An outbreak of rioting in the streets of Jakarta's Chinatown
over the weekend provided the latest impetus for market players
to dump the rupiah.

Late Monday, the dollar was quoted at Rp 8,541, up from Rp
8,485 late Friday.

The currency had been pushed to seven-month low of Rp 8,768 to
a dollar at one point last Friday following a confusing barrage
of comments by Indonesian policy makers. Wahid helped the
currency rebound at the day's end by saying the government was
prepared to act if the currency remained weak.

That sparked speculation that he was prepared to impose some
type of capital controls, but on Monday he said his comments were
misinterpreted.

The Singapore dollar couldn't escape the gravitational pull of
the falling rupiah.

Late in Asia the U.S. dollar was quoted at S$1.7296, up from
S$1.7243 late Friday.

Although the Singapore dollar mimicked the rupiah, its swings
were far more moderate, and its losses were capped by
expectations that the Monetary Authority of Singapore would
intervene above the level of S$1.7300.

Some analysts said there was a chance that the Singapore
dollar and rupiah could get a boost if investors move to
liquidate their long U.S. dollar positions ahead of Tuesday's
Federal Open Market Committee meeting in the U.S.

Market players have been snapping up U.S. dollars on
expectations that the FOMC will raise short-term rates by a half
percentage point, and that it likely will continue raising rates
later in the year.

The Philippine peso also suffered under the weight of the
expected narrowing of interest rate differentials with the U.S.

Profit-taking by banks long on dollars capped the U.S.
currency's gains, however, dealers said.

The dollar closed at 41.560 pesos on the Philippine Dealing
System, up from Friday's close at 41.500 pesos.

Concerns over the conflict in southern Mindanao between Muslim
rebels and government troops, as well as questions on the
stability of the banking industry, have been brushed aside for
the time being, traders said.

The South Korean won slipped to its lowest closing level
against the U.S. dollar in nearly eight weeks on dollar buying by
overseas players in the non-deliverable forward market.

The dollar closed at 1,114.70 won, up from 1,114.50 won on
Friday. It was the highest close for the U.S. dollar since March
21 when it reached 1,116.40 won.

The New Taiwan dollar ended weaker on concerns over relations
with China and the ailing stock markets in Taiwan.

The U.S. dollar closed at NT$30.767, up from NT$30.735 Friday.
Trading was light as many market participants were sidelined,
awaiting President-elect Chen Shui-bian's inauguration speech
Saturday, hoping for clues on future relations with China,
dealers said.

Rupiah weakness weighed on the Thai baht, which breached the a
key support level of 39.200 to a dollar. Lack of liquidity in the
rupiah forced some dealers to sell the baht in a proxy move.

In late trading the dollar was quoted at 39.250 baht, up from
38.845 baht late Friday.