Economists predict Asian monies to be bullish in 2000

Economists predict Asian monies to be bullish in 2000

SINGAPORE (AFP): Most Asian currencies put up a stellar performance in 1999 and are forecast to appreciate again this year on stronger regional economic fundamentals and an inflow of investments, analysts say.

But the direction of the yen, which chalked up a 10 percent gain against the U.S. dollar last year, seems uncertain with evidence of Japan's economic recovery remaining patchy.

"We are very bullish on each and every currency in non-Japan Asia except those in the Indian sub-continent as well as the Chinese yuan," said Bhanu Baweja, senior economist with financial markets analysis firm IDEAglobal.com.

Thio Chin Loo, head of Asian currency research at Banque Paribas, said top Asian currency performers in 2000 would be those whose economies showed "not only continued economic improvement but also commitment to ongoing reforms."

Of the world's 10 best performing currencies against the U.S. dollar in 1999, four -- the Indonesian rupiah, the Japanese yen, the South Korean won and the Taiwanese dollar -- were Asian, she said.

This was a far cry from the rankings list in 1997, when half of the worst performing currencies were Asian. Financial turmoil erupted in Asia in the middle of that year resulting from a regional currency meltdown.

Thio said despite the large reversals now in Asian currency fortunes, most regional units remained undervalued.

She believed the rupiah, the best 1999 Asian currency performer with 11 percent gains against the greenback, could repeat that performance in 2000 if Jakarta was able to promote political and social stability, vital for the return of capital.

For the yen, IDEAglobal.com forecast it would dip to 110 against the dollar at the end of 2000 from its current level of 102.

Banque Paribas, on the other hand, expected the Japanese unit to strengthen, piercing the psychologically-important 100 level.

At the end of 2000, IDEAglobal.com forecast the Indonesian rupiah to appreciate to 6,300 against the U.S. dollar from its 1999 close of 7,037.50, the Thai baht to 35.00 from 37.50, the Philippine peso to 38.50 from 40.25, the Taiwanese dollar to 30.30 from 31.62, the South Korean won to 1,055 from 1,135.50 and the Singaporean dollar to 1.5700 from 1.6656.

It also said the overvalued Hong Kong dollar could decline to 7.8000 against the greenback from its 1999-end level of 7.7717.