Dollar dumping boosts rupiah further
JAKARTA (JP): The rupiah rallied for a second day in a row, on the back of euphoria that swept the market, following the election of Megawati Soekarnoputri as the country's fifth president.
Bank Buana director Pardi Kendi said on Tuesday that market players had continued to dump the U.S. dollar on optimism political stability would return to this country.
The rupiah breached the 10,000 level in Tuesday's trading, as it closed at 9,850 to the dollar, as against 10,230 on Monday.
But Pardi said the rupiah's upsurge had weakened, indicating that room for more gains had narrowed.
"We will see the rupiah stabilizing a bit in the next one or two days," he told The Jakarta Post
According to him, the market is in a honeymoon period with the new government, similar to that which followed the 1999 election of Abdurrahman Wahid to the presidency.
"But this honeymoon period will be far shorter, given the many problems that await Megawati," he added.
Meanwhile, Dow Jones reported the Singapore dollar was also helped by improved sentiment toward the rupiah, as well as market expectations of an off-budget economic stimulus package the government was scheduled to unveil on Wednesday, dealers said.
The U.S. dollar was quoted at S$1.8191 in late Asian trading, down from S$1.8240 late on Monday.
There is a chance the Singapore currency could strengthen further to between S$1.8100 and S$1.8150 against the U.S. dollar if the yen were to rise unexpectedly, or if the rupiah "rallied massively," according to UBS Warburg.
The Thai baht continued to rebound from a 40-month low touched early on Monday.
Foreign exchange traders said they suspected official intervention because institutions that usually act on behalf of the central bank were active in the market. However, the Bank of Thailand denied it had intervened.
In late Asian trading the dollar was quoted at 45.170 baht, down from 45.746 baht late on Monday.
The New Taiwan dollar finished stronger for the fifth consecutive session on continued U.S. dollar-selling by exporters and offshore players.
The U.S. dollar closed at NT$34.878, compared with NT$34.893 on Monday.
Analysts said the New Taiwan dollar's rise was expected to be short-lived because it would take more substantive factors, such as signs of an economic recovery, to sustain a rise in the currency.
The South Korean won edged higher as the local stock market recovered some of Monday's losses.
The dollar finished at 1,308.5 won, slightly down from Monday's close of 1,309.3 won.
The Philippine peso was pressured by lingering domestic economic and security concerns, along with the weakness in the yen, traders said.
The dollar closed at 53.550 pesos on the Philippine Dealing System, up from 53.400 pesos on Monday. (bkm)