Rupiah lower on political concerns

Rupiah lower on political concerns

JAKARTA (Dow Jones): The Indonesian rupiah closed lower Monday amid investor concern over growing political opposition to President Abdurrahman Wahid and security threats, traders said.

After opening at Friday's close of Rp 9,225, the dollar quickly moved higher on news a bomb in the North Sumatran city of Medan over the weekend killed one person.

The bomb, on the Indonesian island closest to Singapore, sparked concern of an escalation in fighting between Muslims and Christians.

The dollar closed Asian trading hours at Rp 9,265, after hitting an intraday high of Rp 9,275.

Local corporate demand for dollars for debt repayments also helped the U.S. currency higher, traders said.

Protests across Jakarta kept a bullish tone to the dollar throughout the day, traders said.

Although the protests to mark the killing of students by security forces two years ago were peaceful, investors are concerned over increasing calls for Wahid's government to reopen the corruption trial against former President Soeharto.

Meanwhile, North Asian currencies slumped under the weight of falling stock prices Monday, while impeachment proceedings against the Philippine president hit the peso and set a bearish tone for other Southeast Asian currencies.

The won opened at around 1,137 per dollar and immediately retreated as investors began selling South Korean stocks.

By the end of Asian trading, the dollar had climbed to 1,138.0 won, up from Friday's close of 1,134.4 won.

Dollar-selling by local exporters prevented the U.S. currency from climbing above 1,139 won. However, the dollar could break above the 1,140 won level Tuesday if New York stock prices turn in another weak performance Monday, dealers said.

In Taipei, falling share prices finally took their toll on the New Taiwan dollar, which had closed higher for eight straight sessions before Monday.

The U.S. dollar closed at NT$32.160, up from NT$32.062 late Friday.

The local dollar had appreciated nearly 1 percent in the previous eight sessions as investors accumulated short U.S. dollar positions. Monday's 4.9 percent drop in Taiwan stocks pressured the New Taiwan dollar and prompted a squeeze in short U.S. dollar positions, dealers said.

The Philippine peso remained vulnerable to political developments in Manila. The dollar closed at 50.350 pesos on the Philippine Dealing System, up from 50.200 pesos at the previous close.

Shortly after peso trading closed the Philippine House of Representatives endorsed the articles of impeachment against Estrada over allegations that he received millions of dollars in illegal payoffs.

The Singapore dollar was slightly lower against its U.S. counterpart in a tight trading range.

Late Monday in Asia, the U.S. dollar was quoted at S$1.7425, up from S$1.7394 late Friday.

With the outcome of the U.S. presidential election likely to be further delayed, the U.S. dollar is expected to trade in a narrow range in a generally directionless market, dealers said.

Against the Thai baht, the dollar was quoted at 43.645 baht late Monday in Asia, up from 43.575 baht late Friday.

Investor sentiment has been running against the baht in the wake of a corruption investigation of Thaksin Shinawatra, frontrunner in upcoming election for prime minister.