Peso up on Estrada news as rupiah falls

Peso up on Estrada news as rupiah falls

SINGAPORE (Dow Jones): The Philippine peso strengthened
modestly on Tuesday in the wake of President Joseph Estrada's
impeachment, reflecting the view of investors that a change of
leadership would be good for the Philippine economy.

However, Estrada's removal from office is far from guaranteed
and the peso will likely remain under pressure as the proceedings
drag on, analysts said.

Elsewhere, regional currencies were mixed against the dollar
in relatively muted trade. The Indonesian rupiah and New Taiwan
dollar weakened, while the Thai baht and South Korean won rose.
The Singapore dollar was virtually unchanged.

The dollar closed Asian trading hours at Rp 9,343, up from
Monday's close of Rp 9,265.

"Corporates were bidding for the dollar for debt repayment and
to pay for imports," a local trader said.

Analysts see debt repayments keeping the dollar above Rp 9,000
for the rest of this year.

Political considerations, including the government's failure
to arrest former dictator Soeharto's fugitive son Hutomo Mandala
Putra, also known as Tommy, are also giving the dollar a bullish
tone.

Indonesia's Supreme Court handed Tommy an 18-month jail
sentence earlier this year for corruption, but he went on the run
last week to avoid beginning his jail term.

Protesters took to the streets Monday to demand police arrest
Tommy.

Meanwhile, Soeharto's ill health - the former president was on
oxygen after suffering a "relapse" Monday - is also weighing on
sentiment.

Many Indonesians want the government to reopen Soeharto's
corruption trial.

Earlier attempts to try Soeharto, who was in power for 32
years until 1998, coincided with a string of bomb attacks linked
to supporters of the ex-dictator.

A court dropped the case after Soeharto was judged medically
unfit to stand trial, but state prosecutors have appealed for a
new trial.

Growing signs of political opposition to President Abdurrahman
Wahid, including calls by a group of lawmakers over the weekend
for him to resign, added to tension Monday.

Still, most analysts believe Wahid has sufficient support from
the powerful Indonesian Democratic Party of Struggle, or PDI-P,
to remain in power.

In Manila, the speaker of the House of Representatives
announced Estrada's impeachment Monday after financial markets
closed, clearing the way for what is expected to be a bitter
trial in the Senate.

The peso traded sharply higher Tuesday morning on the
impeachment news and rumored dollar selling by the central bank,
dealers said.

The dollar opened at 50.300 pesos and fell to 49.650 peso in
the first 90 minutes of trading "mostly on impeachment euphoria,"
said Simon Flint, currency strategist at Bank of America in
Singapore.

In North Asia, the dollar closed at 1,136.30 won, down from
1,138.0 won a day earlier.

The New Taiwan dollar edged lower as sentiment toward local
stocks remained soft.

Late in the Asian session the U.S. dollar was quoted at
S$1.7426, little changed from S$1.7425 late Monday.