Rupiah leaves Asian currencies chilled
Rupiah leaves Asian currencies chilled
SINGAPORE (Reuters): Asian currencies enjoyed a slight respite in late trade yesterday as the Indonesian rupiah recovered from a collapse below 10,000 to the dollar.
But the breather was likely to be shortlived, dealers said.
The rupiah, a source of recent batterings of Asian currencies, fell to 10,500 earlier on persistent worries about Indonesia's short-term debt, an issue dealers said had not been addressed in the International Monetary Fund (IMF) reforms.
German special envoy Horst Koehler's offer of help -- technical and political -- boosted the rupiah to 9,650/9,975 in late trade.
"The positive statements from Germany did help. But the market is very worried about Indonesia's ability to pay its debt. There is still a very strong demand for U.S. dollar," said a dealer with a U.S. firm.
Strong selling interest of the dollar remained evident around 10,600, a level seen as a strong support for the rupiah.
Signs that some Indonesia's corporate and banks had begun to repay their debt in rupiah instead of dollars did little to boost confidence, dealers said.
"They are paying their counterparties in rupiah but these offshore players would still have to buy back the U.S. dollars," said a dealer.
Adding to the Indonesian woes was the uncertainty over President Soeharto's running mate in the March presidential poll after the head of the ruling Golkar party said Soeharto was ready to be nominated for a seventh term.
Indonesia's crisis weighed on the rest of Asia, forcing even remote Fiji to devalue its dollar by 20 percent to an official level of $0.5201.
Fijian authorities said the strength of the domestic dollar, which is pegged to a basket of currencies including the Australian and New Zealand dollars, the yen, U.S. dollar and sterling, was hurting trade and the tourist industry.
The Malaysian ringgit slipped to 4.2950 to the dollar from 4.1300/600 late on Monday, but dealers said its decline was contained by buying of the ringgit/Singapore dollar cross and high domestic interest rates.
The benchmark three-month Kuala Lumpur Interbank Offered Rate crossed the key 10-percent mark on Tuesday. It was fixed at 10.04 percent against 9.57 percent on Monday.
Malaysian Finance Minister Anwar Ibrahim said interest rates might rise further as Malaysia tried to rein in credit growth.
Anwar also said Kuala Lumpur was willing to take tough new austerity measures to protect the economy and the privatization process would have to be reviewed.
The Singapore dollar slid to 1.7650 per U.S. dollar, but recovered to 1.7570/00 in late trade after the release of better than expected export data.
Singapore reported a 13.3 percent rise in non-oil domestic exports in December year-on-year. But dealers said the regional turmoil might push the Sing back towards 1.80 in the near term. The ringgit/Sing cross was seen heading for 0.4300 and then 0.4500, dealers said. It was at 0.4154/90 at 1100 GMT.
The Thai baht recovered to 52.850 per dollar onshore against 52.85/53.15 late on Monday. The offshore rate was at 52.00/500 against 52.00/52.50.
Dealers said its descent was more muted as players held on for the outcome of talks on the review of IMF-sponsored reforms tied to Thailand's $17.2 billion loan package.
The Philippine peso outshone its neighbors due to perceived intervention by the central bank and expected inflows of $500 million from Swiss banks due to repatriate the wealth of former dictator Ferdinand Marcos.
Manila traders said the central bank was believed to be intervening through two foreign banks with which it has swap accords. The peso was at 41.00/00 against Monday's 41.10 close.
In north Asia, the Korean won's recent rise halted amid signs that foreign inflows to the stock market were subsiding.
Dollar demand for importer deals also weighed on the won, pushing it to 1,635/47.0 to the dollar from Monday's 1,584 close.
The Taiwan dollar was hit by weakness in the rupiah and yen, but traders said its fall would be cushioned by demand for cash ahead of the Chinese New Year holiday at the end of the month.
The Hong Kong dollar was steady at 7.7375/95 to the U.S. dollar, but forwards edged up amid weakness in other currencies. The Indian rupee was steady at 39.00/10 as central bank moves to squeeze domestic liquidity and jack up interest rates forced `firms out of long dollar positions.
The Australian dollar slipped to US$0.6626/31 against 0.6655/60 late on Monday in reaction to the rupiah's slide.
The following table shows the drop in value of Asian currencies since the crisis began in July. Currency movements are in percentage terms and reflect the local unit's fall against the dollar, not the dollar's rise.
Currency Current value Move since July 1.
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Indonesian rupiah 9,600.00 -74.67%
Thai baht 52.95 -51.09%
Korean won 1,635.00 -45.69%
Malaysian ringgit 4.20 -40.00%
Philippine peso 41.00 -35.37%
Taiwan dollar 33.55 -17.29%
Singapore dollar 1.75 -18.50%
Hong Kong dollar 7.73 -0.14%
Indian rupee 39.00 -8.17%