Rupiah is the worst performer of the year
Rupiah is the worst performer of the year
LONDON (Reuters): The Indonesian rupiah has clocked up the
biggest foreign exchange loss of 1997 so far and analysts say it
is in almost uncontrolled freefall where only round figures make
any difference.
Out of a selected group of 25 emerging market currencies --
see table below -- the Indonesian unit has been the worst
performer of the year and the Argentine peso the best, simply by
not moving at all.
"The story is that the dollar bloc and those few who managed
to keep tracking the dollar were the currencies to be in this
year," said Paul MacNamara, emerging markets economist at Julius
Baer Investments.
"The mark bloc was reasonable but the yen area was a
disaster."
The rupiah played catch-up with the dwindling South Korean won
on Friday, losing more than 10 percent during Friday's session
alone to less than half its value at the beginning of 1997.
Heightened concerns about the health of Indonesian President
Soeharto accelerated the rupiah's mammoth slide this week.
The rupiah ploughed through the psychological 5,000 per dollar
level and set a record low at 5,383.61 in London trade before
stabilizing about 5,100.
The move was its biggest ever one-day slide and it was last
trading 11 percent weaker from Thursday's close.
"This is a freefall and not even a controlled one at that,"
said Gerry Celaya, foreign exchange analyst at American Express
Bank.
"We need to see some kind of confidence returning in the
domestic markets but there's no obvious sign of that before year
end," said Celaya. "It's just look for the next round figure in
terms of levels."
Earlier, Soeharto canceled a trip to this week's summit
meeting of the Association of Southeast Asian Nations (ASEAN) in
Kuala Lumpur on medical advice. Minister/State Secretary
Moerdiono said Soeharto had also canceled a planned trip to the
grave of his wife Tien in Central Java on Saturday.
Jakarta stocks tumbled 7.64 percent to a 52-month low in
Friday
Traders said market conditions are now extremely thin and
there is a last-minute year-end scramble for dollars by domestic
companies across Asian markets.
Very little of what is happening now is related to foreign
investors or speculators and few were left in these markets
anyway, they said.
"The exchange rate level has become almost meaningless now.
Next year is what we have to look to and someone, somewhere is
bound to start looking to these markets as cheap," said one
trader at a Dutch bank here.
Nominal percentage changes in selected emerging market
currencies since Jan. 2 1997 and late Friday Dec. 12 -- expressed
in terms of rise or fall of dollar or mark exchange rate.
Singapore dollar 17.7 pct
Hong Kong dollar 0.2 pct
New Taiwan dollar 17.5 pct
South Korean Won 103.1 pct
Thai baht 76.0 pct
Indonesian rupiah 112.0 pct
Malaysian ringgit 52.2 pct
Philippine peso 43.6 pct
Indian rupee 10.2 pct
Russian rouble 6.1 pct
Mark/Polish zloty 8.3 pct
Mark/Czech crown 11.9 pct
Mark/Hungarian Forint 8.7 pct
Ukrainian hryvnia 0.3 pct
Rumanian leu 92.0 pct
Estonian kroon 15.3 pct
Kazakh tenge 2.7 pct
Turkish lira 86.0 pct
Morrocan dirham 11.1 pct
Egyptian pound 0.2 pct
South African Rand 4.2 pct
Kenyan Shiling 14.9 pct
Mexican peso 3.6 pct
Brazil's real 7.4 pct