Regional currencies see no immediate respite

Regional currencies see no immediate respite

SINGAPORE (Reuters): Southeast Asian currencies fell out of
bed with a bump yesterday as dissatisfaction with Malaysia's
budget and signs of political upheaval in Thailand spurred demand
for dollars across the board.

The region's malaise looked set to become more entrenched in
North Asia, with the central banks of Taiwan and South Korea
abandoning their previously staunch currency defenses.

In Malaysia, the ringgit extended its losses against the
dollar, falling more than three percent from its levels before
the release of the budget last Friday.

It was at 3.3150/250 to the dollar at 1050 GMT against
3.2200/300 on Friday.

Dealers said the lack of any ringgit-supportive measures in
the budget, which included a corporate tax cut and measures to
slow growth in credit and imports, was hurting the ringgit.

"The budget came in as a bit of a disappointment as it really
has nothing to support the ringgit," a European bank dealer in
Singapore said. "This is a good excuse for funds to start buying
back the dollar."

Pressure on the ringgit prevented a rebound in the Singapore
dollar despite the release of unexpectedly strong export data for
September, dealers said.

Singapore's non-oil domestic exports rose a nominal 15.8
percent year-on-year in September to S$8.46 billion after rising
5.5 percent in August, the Trade Development Board said. A
Reuters poll of 11 economists last week had forecast a 5.9
percent rise in the nominal figure.

The Singapore dollar briefly firmed through the 1.56 level to
the U.S. dollar after the news but was unable to sustain its
gains as players continued to seek dollars.

"Dollar/Sing did pull back a little bit but under normal
circumstances, it would have gone towards 1.52/1.53. People are
looking more towards the regional crisis," said Ishak Ismail,
market intelligence analyst at I.D.E.A.

The Thai baht hit a new low of 38.20 to the dollar in late
trade on pessimism about the country's economic and political
outlook after Finance Minister Thanong Bidaya said on Sunday he
would resign following a cabinet reshuffle this week.

The baht was at 38.20/50 per dollar at 1050 GMT against
38.10/15 six hours earlier. It remained depressed onshore at
37.63/73 against 37.55/60 earlier.

Thanong's resignation, after barely four months on the job,
was expected to deal a further blow to Thailand's crisis-ridden
economy and possibly jeopardize a $17.2 billion loan package
arranged by the International Monetary Fund (IMF).

"Despite the break, the baht is still very vulnerable. Unless
there is good news coming forth, it will remain under pressure,"
said a Singapore-based dealer.

The Indonesian rupiah remained weak but came off its lows
after the central bank called a news conference to explain its
steps in the wake of the current monetary situation.

It was at 3,620/40 to the dollar against 3,685 six hours
earlier and 3,600/40 at the open.

The Taiwan dollar ended at T$30.451, its first close below the
T$30 level in a decade, against Saturday's T$29.760. Its decline
shook Taiwan's stock market, already troubled by a sell-off in
U.S. high-tech shares, causing the weighted index to end 3.96
percent lower at 7,316.78.

Analysts said the central bank's new hands-off policy, after
weeks of defending its dollar in the face of the regional
currency crisis, could cause the unit to reach T$31 soon.

The Korean won slumped to new lows, ending at 924.00 to the
dollar, a near one percent decline from its Friday 914.90 close.

The central bank sold $500 million at 914.50 won at the open
but later gave up as the stock market continued to head south
amid fears of a chain reaction of corporate defaults.
The Philippine peso ended weak at 33.95 to the dollar despite the
central bank's early intervention to sell dollars at 34 pesos.