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