Rupiah, baht extend Tuesday's gains

Rupiah, baht extend Tuesday's gains

SINGAPORE (Dow Jones): Asian currencies were mixed late
Wednesday, with the South Korean won and the New Taiwan dollar
succumbing to sharp losses on their local bourses following
Nasdaq's overnight plunge.

In Southeast Asian markets, the Indonesian rupiah and the Thai
baht extended Tuesday's gains. The Philippine peso was also
stronger, while the Singapore dollar was weaker.

The Indonesian rupiah continued its rally Wednesday, thanks to
U.S. dollar selloffs by state banks. Some dealers say the
Indonesian Bank Restructuring Agency also sold dollars.

The rupiah, however, had to give up some of its gain as local
companies snapped up the dollar on its slide.

After falling to an intraday low of Rp 9,180, the dollar
closed at Rp 9,240 in Asia, down from Rp 9,270 Tuesday.

Dealers said they believed state banks were selling dollars on
behalf of Bank Indonesia. They said IBRA also sold dollars to
convert its dollar revenues raised from assets sales before
transferring the money to the government's coffer.

Coordinating Minister for the Economy Rizal Ramli said
Wednesday the rupiah's fair value should be between Rp 7,300 and
Rp 7,500 per dollar.

Bank Indonesia may not be able to drive the dollar to that
level any time soon given the unstable domestic politics.

However, driving the dollar to Rp 9,000 by the end of the year
isn't an ambitious target, dealers said.

The U.S. Federal Reserve's move to an easing from a tightening
bias, which wasn't unexpected, has removed any ambiguity about
the pace of the U.S. economic slowdown and raised the prospects
of an interest rate cut in January.

The Fed warned Tuesday that the risks of "economic weakness in
the foreseeable future" exceed the risks of inflation, although
it left short-term interest rates unchanged.

A minority of market players who had hoped for an interest
rate cut were disappointed, but analysts downplayed the impact of
Tuesday's outcome on Asian currency markets.

Instead, position squaring ahead of the yearend had weighed on
the dollar against Southeast Asian currencies earlier in the day,
with the thin liquidity magnifying the currency movements,
dealers said.

Steep losses on the Taipei and Seoul bourses, roiled by the
4.3 percent plunge on Nasdaq Tuesday, hit the New Taiwan dollar
and the South Korean won, although central bank intervention kept
a rein on the New Taiwan dollar's decline. The Japanese yen's
weakness had also cast a shadow on both currencies.

The dollar, which was also aided by demand for the currency
from local importers, ended at 1,217 won, higher than 1,209.2 won
Tuesday. Against the New Taiwan dollar, the U.S. currency closed
at NT$33.129, the highest close since April 6, 1999. The U.S.
dollar ended at NT$33.081 Tuesday.

The Thai baht surged to a 10-week high on position-squaring
and stop-loss dollar selling, dealers said. Easing global oil
prices and reduced capital outflows to repay dollar-denominated
debt also bolstered the baht, they added.

The baht's gains and remittance inflows from Filipinos working
overseas lifted the Philippine peso, dealers said.

The dollar closed at 50.058 pesos on the Philippine Dealing
System, down from 50.075 pesos Tuesday.

Against the Singapore dollar, the U.S. currency was at
S$1.7345, up slightly from S$1.7337 late Tuesday, but well within
its recent ranges.