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.