Most Asian currencies close lower, rupiah still suffering
Most Asian currencies close lower, rupiah still suffering
SINGAPORE (Dow Jones): Most Asian currencies weakened against
the U.S. dollar in regional trading hours Wednesday with the
Indonesian rupiah bearing the brunt of the decline.
The Philippine peso also suffered steep losses before the
central bank intervened near the end of the trading session to
drive the local currency back up.
The embattled rupiah continued to suffer from investor
skepticism regarding the ongoing turmoil in the Indonesian
government, falling to a six-month low in intraday trading.
President Abdurrahman Wahid fired two key Cabinet ministers
late Monday and rumors swirled Wednesday about another round of
dismissals.
Market players said that while Wahid may have had the backing
of the International Monetary Fund, his leadership may be
threatened by a loss of support from other political factions in
his government.
"Near term we expect rupiah weakness to persist until the air
is clear among the coalition partners," analysts at WestLB bank
said in their daily commentary.
The dollar climbed to Rp 8,080 during intraday trading, its
highest level since it touched Rp 8,260 on Oct. 15, 1999.
Near the end of trading the dollar was quoted at Rp 8,023, up
from Rp 7,935 late Tuesday.
Meanwhile, the peso hovered near an 18-month low for most of
the day as month-end demand for dollars and the temporary closure
of cash-strapped Urban Bank weighed on the local currency.
The government ordered the closure of Urban Bank Wednesday,
placing it under receivership after a run on the bank prevented
it from meeting minimum capital requirements.
The dollar rose as high as 41.400 pesos before the central
bank intervened near the end of trading to support the local
currency at about the 41.360-41.370 levels, a dealer at a foreign
bank said.
The central bank's peso buying pushed the dollar lower to
41.310 pesos at the close, down from 41.355 pesos late Tuesday.
The New Taiwan dollar declined as renewed tensions with China
rippled through both the equity and currency markets.
China has stepped up military drills on its eastern coast
across the Taiwan Straits, possibly warming up for a new
intimidation campaign against the island, a government spokesman
in Taipei said.
Analysts said they expected that China would continue to put
pressure on Taiwan ahead of President-elect Chen Shui-bian's
inauguration May 20.
The U.S. dollar closed against the New Taiwan dollar at
NT$30.635, up from NT$30.575 Tuesday.
The Singapore dollar continued its slide as market
participants concluded that the chances of a monetary tightening
were decreasing.
The local currency was bid up last week as market talk focused
on the possibility that the government was shifting toward a
tighter policy in a preemptive strike against inflationary
pressures.
But that view lost credibility when government data released
Sunday showed that the consumer price index rose a smaller-than-
expected 1.2 percent in March compared with a year earlier. That
figure was down from a 1.3 percent year-over-year increase in
February.
Dealers said market participants Wednesday were still
adjusting their positions to reflect the new outlook for the
Singapore dollar.
At the close, the U.S. dollar was quoted at S$1.7060, up from
S$1.7038 Tuesday.
The South Korean won moved higher on talk that Anam
Semiconductor Inc. was selling part of its dollar proceeds from
its recent sale of three factories to Amkor Technology Inc. of
the U.S., dealers said.
The dollar finished at 1,108.10 won, down from Tuesday's close
of 1,108.30 won.
The Thai baht was pulled lower by declines in the rupiah and
Singapore dollar, dealers said.
At the close the dollar was quoted at 38.095 baht, up from
38.045 baht late Tuesday.