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.