Rupiah drops on sporadic dollar buying, others decline

Rupiah drops on sporadic dollar buying, others decline

SINGAPORE (Dow Jones): Most Asian currencies weakened Tuesday
except for the Philippine peso, which rebounded from a six-
session slump after the central bank announced it was considering
another interest rate hike.

Indonesian rupiah closed slightly lower in quiet trade Tuesday
on sporadic dollar-buying by local companies, dealers said.
The rupiah fell against the U.S. dollar to Rp 8,895 in late Asian
trade from Rp 8,875 at the close on Monday.

"Local companies accumulated the dollar again after it slid
Monday," said a dealer with a foreign bank. "But, they weren't
very aggressive (in bidding for the dollar)."

Dealers said most market participants were on the sidelines
Tuesday waiting for the results of the two-day meeting of the
Consultative Group on Indonesia (CGI) in Tokyo, which started
Tuesday.

The international lenders for Indonesia will decide at the
meeting whether to approve Indonesia's request for US$4.8 billion
in loans.

The market, however, widely expect the lenders to approve the
loans, which Indonesia will use to partly fill the deficit of
next year's state budget. The aid, if approved, would be
disbursed next year.

The South Korean won absorbed the biggest hit as investors
dumped local stocks amid concerns that falling chip prices will
hurt the profitability of local manufacturers.

The New Taiwan dollar suffered from continued market concerns
over political developments, and expectations that the central
bank wants to see a weaker currency.

Thai baht and Singapore dollar all finished marginally lower
in lackluster trade.

The dollar closed at 1,133.20 won, up from Monday's close of
1,127.40 won. It was the won's weakest finish since Sept. 22,
when the dollar closed at 1,134.70 won.

In the Philippines, the peso rallied after the central bank
announced that it will study more measures to stabilize the
beleaguered currency, traders said.

The peso had sunk to record lows in recent sessions in the
wake of allegations that Philippine President Joseph Estrada
received millions of dollars in gambling kickbacks. Estrada has
denied the charges.

The dollar closed at 48.300 pesos on the Philippine Dealing
System, down from 48.670 pesos Monday.

Officials said the monetary authority is studying measures
proposed by the banking sector and business community, including
a further increase in its key interest rates and in banks'
reserve requirements.

The central bank last week raised its overnight rates by four
percentage points and announced plans for another increase in the
liquidity reserve requirement of banks.

Meanwhile in London, the euro paused for breath on Tuesday,
consolidating about half a cent above record troughs it hit
against the dollar last month, amid lingering wariness about
further central bank intervention to shore up the single
currency.

The euro was, however, still below the levels it stood at on
Sept. 22, the day the Group of Seven intervened in its defense.

The euro was hovering just below $0.85, within half a cent of
Monday's three-week low below $0.8460, which was barely above a
record trough around $0.8440 hit on Sept. 20. Against the yen,
the euro was pinned below 92 yen.