Most Asian currencies firmer against U.S. dollar
Most Asian currencies firmer against U.S. dollar
SINGAPORE (AFP): Asian currencies were firmer against the U.S.
dollar yesterday, continuing last week's rebound as investors
separated regional units from the plight of the Indonesian
rupiah.
"The markets have differentiated the currencies' strengths and
have separated them from what has been happening to the rupiah,"
said a currency dealer with a European bank here.
While a contagion effect from any negative development in
Indonesia could not be ruled out, "the fear of a worst case
scenario in Asia, that of civil unrest in Indonesia, has subsided
somewhat," said Eddie Lee, regional economist of Vickers Ballas
Investment research.
Among the top gainers in Asian trade here was the Thai baht
which rose further to end at 38.65 to the greenback from last
Friday's close of 39.41.
"The baht is stronger, still riding the euphoria of (Thai
Premier) Chuan Leekpai's government succeeding against a no-
confidence motion. We're seeing confidence restored and capital
flows are increasing," said another currency dealer with a
foreign bank.
The rupiah fell at the open but reversed its direction mid-
afternoon to end trade at 9,250 against the greenback, up from
9,400, its close on Friday when it cracked the psychological
10,000-level barrier.
In Jakarta the rupiah closed 8,900.
The rupiah's gain was a knee-jerk reaction to the central Bank
Indonesia's increase in interest rates on its certificates, known
as SBIs, to mop up excess liquidity, the dealer with a European
bank said.
"The markets didn't expect this and they were caught long on
dollars," the dealer said.
Another gainer was the Malaysian ringgit, which traded at
around 3.5299 from last Friday's close of 3.6650, as investors
remained optimistic about economic stimulus measures to be
announced by Malaysian Deputy Prime Minister Anwar Ibrahim on
Tuesday.
The Philippine peso also rallied to end at 37.69 against the
dollar from 37.81 on Friday, and the Singapore dollar was up at
1.5985 from 1.6085.
The South Korean won, boosted by an inflow of foreign funds
ended higher at 1,366 from 1,445, and the Taiwan dollar, which
opened weak was up slightly at 32.763 from 32.770.
News that the Indonesian finance ministry had canceled a
planned five percent tax on foreign exchange purchases, intended
to curb speculation on foreign exchange, hardly affected the
rupiah's trade against the greenback.
"The markets are basically looking for signs that the IMF will
release a much-needed tranche of funds to Indonesia. That's the
direction investors are looking at," said the dealer with the
European bank.
In continuing talks between the International Monetary Fund
(IMF) and Indonesia, the IMF hinted it would relax some demands
for economic reforms following increasing social unrest and
expressions of concern from Indonesia's neighbors.