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.