Holidays bring relief to battered Asian currencies
Holidays bring relief to battered Asian currencies
HONG KONG (AFP): Many of the region's currencies strengthened during the week, aided by shortened trading weeks due to holidays as well as internal efforts to help their battered economies.
Rupiah: The Indonesian currency ended last week's trading on Thursday at between 9,800 and 11,500 rupiah to the dollar, up from the previous week's close of between 12,761 and 13,039.
The currency had gained strength from an ambiguous government plan for debt-laden local corporations to seek a freeze on repayments to their foreign creditors.
Financial markets and analysts had cautiously welcomed the announcement Tuesday, despite doubts over prospects for the plan's success.
Indonesia's private sector is saddled with an estimated US$66 billion in foreign debt, much of it short term. Non-banking corporates are believed to account for some $55 billion of the total.
A shortened trading week for the Moslem Eid al-Fitr (Idul Fitri) feast also helped give the battered currency a reprieve. The dollar has appreciated by 500 percent against the rupiah since the crisis broke in July.
Yen: The yen seesawed against the dollar in Tokyo on developments in two unrelated scandals involving U.S. President Clinton and Japan's finance ministry, which saw the finance minister quit, before closing the week on a weaker note.
It stood at 127.32-35 to the dollar late Friday, down from 126.00-03 to the dollar a week earlier.
The Japanese unit came under heavy selling ahead of the weekend following reports that the finance ministry was accused of telling Yamaichi Securities Co. Ltd. to hide its losses before the major brokerage's collapse.
It started the week firm as both domestic and foreign investors joined exporters in buying the yen at low levels, pushing it to 125.57-59 in late afternoon trading.
It fell back on Tuesday after Clinton denied he had sexual relations with a former White House intern, leaving the dollar higher at 126.25-28 yen.
But the yen crawled back in the following two days on speculation that the Japanese government was to end its belt- tightening policy in the wake of the arrest of two former finance ministry inspectors amid a bribery scandal, which prompted Hiroshi Mitsuzuka to quit as ministry chief.
Thai baht: The Thai baht strongly rebounded against the dollar to close Friday at 52.05-35 to the dollar, compared to the previous week close's of 54. 75-85.
Analysts said the 4.6 percent gain was mainly due to the Bank of Thailand's decision to lift its two-tier money market system late Friday.
They said the baht's performance would be tested by the market next week when the other regional markets, such as Hong Kong and Singapore, reopen after the Lunar New Year holiday.
Another factor in the baht's strong performance was the upcoming visit by International Monetary Fund officials to review Thailand's economic reforms so far.
Australian dollar: The Aussie dollar is vulnerable to further falls in the week ahead following a downgrade in Australia's Aa2 rating for bonds, notes and bank deposits, brokers said Friday. T he Australian dollar closed at 66.93 US cents Friday, down from 67.87 US cents a week ago.
International ratings agency Moody's Investors Services Thursday revised Australia's outlook to "stable" from "positive," sending the local currency plunging to 67.20 cents from its two- month high earlier in the week of 68.27 US cents.
It brought to an end a two-and-a-half week rally during which it gained about five US cents.
"The Moody's announcement should certainly slow the currency's rise and see any rallies to 68 US cents sold into," one trader said.
South Korean won: The won strengthened from 1,746.80 per dollar a week before to 1,572.90 Saturday as spirits rose on an agreement to restructure Seoul's short-term debts.
South Korea on Thursday agreed with international creditors to restructure most of the short-term debts borrowed by South Korean banks as longer-term, government-backed loans.
Under the agreement, some $24 billion of the short-term debts due this year will be converted to one, two and three-year loans to be guaranteed by the government.
Malaysian ringgit: The Malaysian ringgit closed the week higher at 4.4350 to the dollar from 4.5100 a week earlier.
A dealer said fear of economic uncertainty in Indonesia coupled with social unrest there could hit the ringgit in the sessions ahead.
The Malaysian market, closed since January 28 for the Chinese Lunar New Year and the Moslem Eid al-Fitr celebrations, will re- open on Feb. 3.
Philippine peso: The Philippine currency strengthened against the U.S. dollar, closing at 42.89 pesos to the dollar on Friday from 43.40 on Jan 23.
Singapore dollar: The Singapore dollar rose to 1.7360 against the U.S. dollar on Tuesday, the last day of a shortened trading week, from 1.7620 to the greenback on Friday on Jan 23.
Hong Kong dollar: The Hong Kong dollar closed the week at 7.747 - 7.748 against its U.S. counterpart compared to 7.742 - 7.743 the week before.
Taiwan dollar: The Taiwan currency closed at 33.996 to the US dollar on Monday, the only day of trading before the Lunar New Year break, down from the previous week's finish of 33.925. Markets in Taiwan will re-open Monday.