Most Asian monies fall as rupiah extends rally
Most Asian monies fall as rupiah extends rally
SINGAPORE (Dow Jones): Asian currencies were mostly weaker
Friday except for the rupiah, which extended its rally amid
increasing optimism over a political shakeup in Indonesia.
Indonesian President Abdurrahman Wahid Friday offered further
details regarding his plan to delegate day-to-day management of
government operations to Vice President Megawati Sukarnoputri.
The President, more popularly called Gus Dur, who has been
criticized as ineffective in solving Indonesia's economic
problems, clarified that he will not share power with Megawati,
but merely delegate duties to her in a cabinet reshuffle set for
Aug. 21. Gus Dur also said he plans to appoint a coordinating
minister to assist Megawati.
The rupiah has surged nearly 4 percent against the U.S. dollar
since Gus Dur unveiled his plan Wednesday. The dollar fell as low
as Rp 8,300 intraday after trading as high as Rp 8,625 just two
days earlier.
Near the end of Asian trading Friday, the dollar was quoted at
Rp 8,345, compared with Rp 8,350 late Thursday.
Despite the latest calming words from Gus Dur, nothing
fundamental in the Indonesia political story has changed, said
Chia Hsin-Li, a currency research associate at JP Morgan in
Singapore.
"There is still a lot of uncertainty about what will come out
of the cabinet reshuffle," she said. "The current rally just sets
you up for a bigger sell-off should sentiment turn against the
rupiah," she said.
Chia predicted the rupiah will sink to 10,000 per dollar by
late September.
The rebound in the rupiah failed to spill over to other Asian
currencies, which were all lower against the dollar.
The South Korean won ended weaker amid a decline in the Seoul
stock market and an overnight rise in the dollar against the yen
ahead of the Bank of Japan's policy board meeting on interest
rates.
After trading within a narrow range, the dollar finished at
1,115.40 won, up from Thursday's close of 1,114.50 won.
The benchmark Korea Composite Stock Price Index fell 7.07
points, or 0.97 percent, to close Friday at 722.21 on profit-
taking following two days of strong gains.
The Singapore dollar took a pause from its recent run-up,
trading marginally lower against the U.S. dollar late Friday. The
U.S. currency was quoted at S$1.7143, up from S$1.7138 late
Thursday.
The Singapore dollar has risen nearly 2 percent in value since
July 26 when the Monetary Authority of Singapore said it would
allow for a modest appreciation in the currency in the coming
year.
The New Taiwan dollar, which hit a high for the month on
Thursday, weakened Friday amid U.S. dollar demand from corporates
and foreign investors.
The central bank stepped in and stemmed the decline, defending
the local currency at its intraday low of NT$31.089, dealers
said.
At the close, the U.S. dollar was quoted at NT$31.085, up from
NT$31.069 Thursday.
The Philippine peso suffered from negative sentiment stemming
from early losses in the Indonesian rupiah and Thai baht, traders
said.
The recovery of the rupiah later in the Asian day didn't
reverse the peso's losses but helped it recover from its intraday
low at 44.935 pesos to the dollar.
The dollar closed at 44.895 pesos on the Philippine Dealing
System, up from Thursday's 44.870 pesos.
Concerns over political tensions in Thailand pushed the dollar
higher against the baht, dealers said.
The dollar was quoted at 40.805 baht late Friday, up from
40.725 baht the previous day.
Pressure by the opposition party to dissolve the lower house
of parliament is expected to weigh on the baht for the next few
weeks, analysts said.