Rupiah and peso shrug off domestic political problems

Rupiah and peso shrug off domestic political problems

SINGAPORE (Dow Jones): Most Asian currencies strengthened
Tuesday, buoyed by a firmer yen and the unwinding of long-dollar
positions following the U.S. currency's recent run-up.

The Indonesian rupiah and Philippine peso shrugged off
domestic problems to close higher.

Dealers expect the dollar to trade between Rp 11,000 and Rp
11,300 Wednesday.

After rising to Rp 11,635 during intraday trade, the dollar
closed at Rp 11,185.

A local dealer said the dollar selloff was triggered by news
that Vice President Megawati Sukarnoputri's political party will
call for a special parliamentary session, a move which could see
President Abdurrahman Wahid impeached.

Indonesian Democratic Party of Struggle Secretary General
Soetjipto said the party remains disappointed with Wahid's
leadership.

The House of Representatives will meet Wednesday and is widely
expected to call for a session of the People's Consultative
Assembly, which can then impeach Wahid.

Profit-takers helped the New Taiwan dollar reclaim some of the
ground it lost Monday, when it fell nearly 3 percent against the
U.S dollar.

The South Korean won and Singapore dollar rose in line with
the yen, while the baht gained despite uncertainty surrounding
the sacking of the Thai central bank governor.

In Taipei, market participants who had loaded up on the U.S.
dollar during its rally Monday took profits on their long
positions, dealers said.

The U.S. dollar closed at NT$34.072, down from Monday's 32-
month closing high of NT$34.500.

The U.S. currency surged Monday after market players
interpreted comments by a central bank official over the weekend
that the government was prepared to let the New Taiwan dollar
weaken to help the ailing economy.

Profit-taking also dragged the dollar lower against the yen
after initial gains on weak Japanese employment data.

Late in Asian trading, the dollar was quoted at 120.35 yen,
down from 121.13 yen late Monday.

In Bangkok, the market braced for aggressive dollar buying
following the dismissal of central bank Governor Chatu Mongol
Sonakul. But when the dollar demand failed to materialize,
players liquidated their long-dollar positions, lifting the baht.

Toward the end of Asian trading, the dollar was quoted at
45.425 baht, down from 45.595 baht late Monday.

Chatu Mongol clashed with Prime Minister Thaksin Shinawatra
over the direction of interest rates. Chatu Mongol believes that
low rates are appropriate given Thailand's weakening economy, and
the Bank of Thailand has kept the benchmark 14-day repurchase
rate at 1.5 percent for more than a year.

Thaksin and the Thai finance minister, however, have expressed
concern that the low rates have led to capital flight.

In Manila, President Gloria Macapagal Arroyo sought to
reassure the country she was taking steps to halt a rash of
kidnappings after 20 people were snatched by Muslim separatists
from a resort off Palawan in southern Philippines.

The dollar closed at 50.500 pesos on the Philippine Dealing
System, down from 50.770 pesos Monday.

Philippine central bank Governor Rafael Buenaventura predicted
the pressure on the peso would continue to ease Wednesday. "It
will remain stable with the gradual elimination of the premium
associated with the kidnappings," he said.

The South Korean won was helped by the yen and market optimism
that General Motors Corp. may soon buy bankrupt Daewoo Motor Co.

The dollar breached the 1,290 won support to finish at 1,289.6
won, down from Monday's close of 1,294.0 won.

The Singapore dollar was aided by stronger regional currencies
and talk that Qantas Airways has approached Singapore Airlines
and Singapore-headquartered Brierley Investments to buy their
stakes in Air New Zealand.