Rupiah closes flat, off lows after donors approve loans
Rupiah closes flat, off lows after donors approve loans
JAKARTA (Dow Jones): The Indonesian rupiah closed flat Wednesday, but off intraday lows after donor nations agreed to the country's request for US$4.8 billion in loans to fill a hole in next year's budget deficit, dealers said.
The dollar closed at Rp 8,895 in Asia, unchanged from its close in Asia Tuesday.
The U.S. unit climbed to Rp 8,950 in the morning in line with its movements against other regional currencies, including the Thai baht and Philippine peso.
However the dollar retreated to close flat after the Consultative Group on Indonesia agreed in Tokyo to supply Indonesia with $4.8 billion worth of soft loans for the 2001 budget deficit.
Traders had been concerned donors, especially the U.S., would withhold some of the aid until the end of violence in West Timor, where three United Nations workers died last month.
"There was some long-dollar liquidation after the announcement on the aid," a local trader said.
Still, the dollar should be well supported at Rp 8,870 Thursday as most traders had expected Indonesia to receive the aid. Dollar resistance is seen at Rp 8,910-20.
The rupiah's current weakness is more a result of continued political concerns, rather than concerns over the balance of payments situation, traders said.
Most Asian currencies were weaker late Wednesday, with the New Taiwan dollar dropping to a new 16-month low late in the session after the central bank withdrew active support for the local currency in the foreign exchange market.
After spending an estimated US$800 million during the day to defend the New Taiwan dollar, the Central Bank of China - the local central bank - late in the session loosened its grip on the currency, allowing it to fall briefly to NT$32.500 against the U.S. dollar.
The U.S. dollar ended domestic trade in Taipei at NT$32.383, up from NT$32.260 a day earlier and marking its highest close since June 1999.
The South Korean won slid to its lowest levels since May in early trading, although it managed to pare those losses after the stock market staged a spectacular rebound late in the day following the announcement of stock-supportive measures by the South Korean government.
The dollar initially rose as high as 1,141.50 won, its highest level since May 24. But the South Korean currency rebounded smartly at the end of the day, pushing the dollar down to 1,136.7 won at the close.
In Manila, the Philippine peso suffered in response to news that the International Monetary Fund had decided to cancel $300 million in loans to the nation because of Manila's failure to meet fiscal targets attached as conditions for the loan program.
That, coupled with a fresh bout of political jitters after opposition politicians submitted an impeachment resolution against President Joseph Estrada, pushed the dollar as high as 48.700 pesos.
The peso later regained some of those losses, with the dollar closing at 48.570 pesos, up from 48.300 pesos at the previous close.
The Singapore dollar slipped late Wednesday as it succumbed to the weakness of its regional counterparts.
In late trading, the dollar was at S$1.7560, up from S$1.7533 late Tuesday in Asia.
In Bangkok, the dollar rose sharply against the baht after the central bank indicated it remains unconcerned about the weakening of the local currency.
Late in the day, the dollar was trading at 43.705 baht, up from 43.365 baht a day earlier.