Rupiah in steady rise as other currencies rebound
Rupiah in steady rise as other currencies rebound
SINGAPORE (AFP): The Indonesian rupiah persisted in its steady
rise against the U.S. dollar in thin trade yesterday as other
Asian currencies led by the Thai baht made up for their losses
after a brief sell-off the day before.
Positive though cautious sentiment pushed the rupiah up to
8,375 to the dollar in Jakarta mid-afternoon from 8,700 on
Tuesday, as investors assessed comments from officials on talks
between Indonesia and the IMF for the release of a second tranche
of badly-needed funds to the crisis-stricken country, dealers
said.
"The rupiah is drifting higher even in quiet trade the past
few days but the market still perceives that Indonesia is
reaching a compromise with the IMF," said a dealer with a French
bank in Singapore.
Other regional units resumed their ascent against the
greenback after briefly being derailed by profit-taking Tuesday,
as additional measures to stimulate Malaysia's economy announced
by Malaysian Finance Minister Anwar Ibrahim met with mixed
reactions from the market.
The Thai baht was firmer at 38.85 to the greenback, off its
earlier highs, from Tuesday's close of 39.05, despite concerns
that a stronger baht would erode the competitiveness of
Thailand's exports.
"Government officials have raised their fears of the inability
to export its way out of the recession given its (Thai baht's)
strength," ANZ Investment Bank said in a report yesterday, adding
that "the market's bias for a strong baht may be overdone."
Thai Finance Minister Tarrin Nimmanahaeminda on Wednesday said
that the current levels of the baht will not affect exports.
Other Asian currencies edged up against the dollar in tight
ranges from the previous day, such as the Philippine peso at
36.95 from 37.31, and the Singapore dollar at 1.6048 from 1.6069.
The Malaysian ringgit fell to 3.6500 against the greenback
from Tuesday's close of 3.6250, the South Korean won slid to
1,380 from 1,375, as did the Taiwan dollar to 32.689 from 32.653.
The recent strengthening of the won at 1,300-won levels and
the baht to 38-baht levels to the dollar has had Thai and South
Korean finance officials seeking to lower high interest rates
imposed as part of separate aid packages worth billions of
dollars extended to them by the International Monetary Fund
(IMF).
"If the baht continues to stabilize then interest rates could
be adjusted and lowered," Tarrin said in Bangkok.
Bank of Korea governor Chon Chol-hwan told reporters in Seoul
that the government and the IMF have agreed to start talks to
lower market interest rates but "the problem is that the two
sides are showing some differences as to whether the current
forex rate is stable or not."
A senior U.S. official in Washington on Tuesday said it was
too early to tell if the IMF and the Indonesian government would
be able to put back on track a stalled economic reform program.
Thailand, South Korea and Indonesia have been the worst hit by
the Asian economic crisis and have been each allocated multi-
billion dollar aid packages by the IMF to help revive their
economies.