Rupiah gets boost from IMF, others Asian currencies fall
Rupiah gets boost from IMF, others Asian currencies fall
SINGAPORE (Dow Jones): International Monetary Fund acting
chief Stanley Fischer gave the rupiah a shot in the arm Monday
with upbeat comments about prospects for economic reform in
Indonesia.
But most other Asian currencies finished local trading hours
lower under the weight of falling stock markets.
Fischer, in Jakarta to meet with President Abdurrahman Wahid
and several top ministers, said earlier Monday he was confident
the government would continue to carry out the reforms necessary
to win approval of a US$400 million IMF loan.
Indonesia's course would allow the rupiah to "strengthen in
due course," he added.
His words had an immediate impact on the Indonesian currency,
which had fallen to a six-month low against the dollar last week.
Late in Asia the U.S. dollar was quoted at Rp 7,845, down from
Rp 8,005 late Thursday. Most markets in Asia were closed Friday
for Good Friday.
The rupiah has been at the mercy of currency traders in recent
months. Nothing has changed fundamentally in the Indonesian
economy yet the currency has moved from Rp 7,300 to the dollar to
Rp 8,000, said Vincent Low, foreign-exchange and interest-rate
strategist at Merrill Lynch in Singapore.
"The volatility reflects some pretty jumpy investor
sentiment," he said.
Dealers said market participants moved out of the currency
last week as they were afraid of excessive rupiah exposure prior
to the long holiday weekend.
"Now with the statements from Fischer they're buying the
rupiah back," a dealer at a foreign bank said.
Just as the market may have "overshot" in pushing the rupiah to
8,000 to the dollar, Fischer's comments by themselves may not
have brought the currency back to its fair value, Low said.
"The market's going to need a lot of concrete proof before the
significant overhang of doubt goes away," he said.
In Northern Asia, falling stock prices weighed on the New
Taiwan dollar. The Weighted Price Index of the Taiwan Stock
Exchange fell 3.4 percent.
The Taiwan central bank moved in to halt the decline in the
New Taiwan dollar, which was hit by foreign equity outflows.
"The central bank capped the (U.S.) dollar buying, but the
demand was still very strong," a dealer at a foreign bank said.
The currency hit an intraday low of 30.596 to the dollar
before recovering slightly at the close. The U.S. currency was
quoted at NT$30.566, up from 30.530 the previous session.
The South Korean won finished slightly lower in thin trading.
End-of-month dollar selling by local exporters during the
morning session pulled the dollar to an intraday low of 1,107.80
won.
But dollar-buying by state-run Korea Development Bank
prevented the dollar from falling further, prompting local banks
to cover short dollar positions, traders said.
Late Monday the dollar was quoted at 1,108.80 won, compared
with 1,108.50 won Friday.
The rise of the Singapore dollar in recent trading sessions
came to an end Monday as the U.S. currency moved back above the
psychological level of S$1.7000.
Dealers said the Singapore dollar's rally last week was
overdone and market participants realized they had better
position themselves for further interest rate hikes expected in
the U.S.
The U.S. dollar closed at S$1.7002, up from S$1.6965 at the
end of the previous session.
The Philippine peso closed lower against the dollar as banks
held onto their long dollar positions.
The dollar closed at 41.275 pesos at the Philippine Dealing
System, up from 41.230 pesos.
The Thai baht finished lower in quiet trading as market
participants waited for economic data due out later this week.
The dollar was quoted late Monday at 37.935 baht, up from
37.920 baht.