Rupiah sold down in thin holiday market

Rupiah sold down in thin holiday market

HONG KONG (Dow Jones): Selling pressure pushed both the
Indonesian rupiah and the Philippine peso to new lows for the
year during Asian trading hours Tuesday.

But in a week scattered with regional holidays, trading in
most foreign exchange markets was subdued and volumes relatively
thin.

The closure of financial markets in Jakarta didn't relieve the
pressure on the rupiah, however, as offshore market players based
in Singapore continued to sell down the Indonesian currency.

The rupiah has come under increased pressure over the last
week after the International Monetary Fund delayed the
disbursement of $400 million in assistance funding originally
scheduled for April.

Sentiment worsened further after the government postponed the
removal of fuel price subsidies planned for April 1, heightening
fears that the pace of economic restructuring is flagging.

Singapore-based dealers reported significant interest from
offshore banks to buy dollars against the rupiah Tuesday, despite
the illiquidity of the rupiah market with Jakarta closed.

Intraday trading saw the U.S. currency pushed as high as 7,780
rupiah, its highest since mid-October 1999, before profit-taking
set in.

Toward the end of trading in Singapore the dollar was quoted
at Rp 7,700, up from Rp 7,685 the previous day.

Further interest to take profits is likely to emerge around Rp
7,750, capping the market below Rp 8,000 in the near term,
according to dealers.

The Philippine peso also came under pressure Tuesday as the
perception that President Estrada's government has lost its
policy direction, and as last weekend's rumors of a potential
coup attempt continued to be felt in the market.

But fears the central bank would intervene to support the peso
capped the dollar at 41.200 pesos, a six-month high.

By the close of trading in Manila, the dollar had retreated to
end at 41.150 pesos, up from 41.135 pesos, the previous day.

Elsewhere in Southeast Asia, activity was quiet. With the yen
trading sideways through Asian hours there was little to move the
Singapore dollar or the Thai baht, said dealers.

Late in the day, the U.S. dollar was quoted against the
Singapore currency at S$1.7177, up from S$1.7142 the day before.
Resistance at S$1.7200 is likely to cap the U.S. dollar in the
short to medium term, said dealers.

Against the baht, the dollar was quoted at 37.790 baht, little
changed from 37.780 baht late Monday. Traders say the dollar is
unlikely to be pushed above offers in the 37.850 baht to 38.000
baht level.

In North Asia the won traded lower as a sell-off in the local
stock market combined with the threat of further intervention
following the central bank's dollar purchases Monday lessened
market appetite for the South Korean currency.

At the close the dollar was trading against the won at
1,113.40 won, up from 1,112.30 won the day before. The Seoul
market is closed for a holiday Wednesday.

Markets in Taipei were closed Tuesday.