Most Asian currencies up, rupiah left out in the cold
Most Asian currencies up, rupiah left out in the cold
SINGAPORE (Dow Jones): Most Asian currencies were slightly stronger late Wednesday, finding a reprieve after the yen's advance to a three-week high and strong gains on many of the regional bourses, dealers said.
The Indonesian rupiah was the only one left out in the cold, as companies - including the state-owned oil company - snapped up dollars. Domestic political tensions also weighed, which are expected to intensify ahead of parliament's planned censure of President Abdurrahman Wahid April 30.
The dollar had threatened to break Rp 11,000 in early trade, but retreated on intervention by the local central bank and profit-taking by interbank participants, dealers said.
A Jakarta-based dealer said he believed the central bank had sold some $20 million Wednesday through brokers to rescue the rupiah.
At 0900 GMT (4 p.m. Jakarta time), the dollar was at Rp 10,958, higher than Rp 10,865 late Tuesday.
"Regrettably, the rupiah is not benefiting from this period of respite," said David Simmonds, a regional currency strategist at Salomon Smith Barney/Citibank. "This would mean short-term SBI (Sertifikat Bank Indonesia notes) rates will have to go up again."
Indeed, the weighted average interest rate on one-month Sertifikat Bank Indonesia notes edged up to 15.93 percent at this week's auction, from 15.82 percent last week, the central bank said on Wednesday.
Still, analysts say higher interest rates won't solve the rupiah's woes, as this would raise the cost of funding Indonesia's bailout of its banking sector.
Elsewhere in the region, currencies found comfort from the yen's gains.
The dollar fell to an intraday low of Y122.66 at one stage, its lowest level since March 29, as Vice Finance Minister for International Affairs, Haruhiko Kuroda's remarks Tuesday, that Japan won't seek a weak yen policy to revive the economy continued to weigh on the dollar.
Late Wednesday, the dollar was quoted at Y123.07, below Y123.34 late Tuesday in New York.
Despite the yen's recent recovery, which has in turn bolstered the rest of the region's currencies, analysts are hesitant to say that the worst is over.
"I think it's a little too early to draw the line in the sand," said Simmonds at Salomon Smith Barney/Citibank.
Indeed, on an effective exchange rate basis, the New Taiwan dollar remains strong, Simmonds added.
Against the New Taiwan dollar, the U.S. currency closed at NT$32.920, down from NT$32.926 Tuesday, thanks to the yen's strength and a 1.4 percent jump on the Taipei bourse Wednesday.
Taiwan's central bank kept a rein on the local currency's appreciation, buying an estimated $150 million Wednesday, said a Taipei-based dealer.
The Singapore dollar was only marginally stronger at S$1.8065 against its U.S. counterpart, compared with S$1.8068 late Tuesday.
The South Korean won was the biggest gainer in Asian foreign exchange markets, inspired by yen gains and a 5.1 percent rally on the local bourse.
The dollar closed at 1,314.2 won, down from Tuesday's close of 1,324.1 won.
On the Philippine Dealing System, the dollar closed at 50.110 pesos, down from 50.300 pesos Tuesday.
The Thai currency strengthened to 45.395 baht against the dollar, compared with 45.515 pesos late Tuesday.
Thai Prime Minister Thaksin Shinawatra said on Wednesday, his government will allow the baht to move in line with the market, although the government wants "to make sure it will be stable".