Rupiah, Taiwan Dollar Strengthen: Asian Currencies
Rupiah, Taiwan Dollar Strengthen: Asian Currencies
Bloomberg Jakarta
The Indonesian rupiah rose for a second day after a group that included the Singapore government's investment arm won its bid for a 51 percent stake in PT Bank Internasional Indonesia.
Indonesia's auction of the country's sixth-largest bank and the proposed sale of two other lenders boosted expectations of increased demand for the rupiah. The Indonesian bank rescue agency declined to say how much the group will pay for the stake.
The rupiah climbed 0.5 percent to 8,498 against the dollar at 3:45 p.m. Jakarta time, bringing gains this year to 5.4 percent.
The Singapore dollar, little changed at S$1.7341, may weaken. The successful bid, made by Singapore's Temasek Holdings Pte. and Kookmin Bank, South Korea's biggest lender by assets, spurred speculation of sales of Singapore dollars to buy rupiah to fulfill the transaction.
Purchase of "assets in other countries will slightly dampen" the Singapore dollar, Widjaja said.
Indonesia is selling Bank Internasional and other assets to fund its budget deficit, estimated at 34.4 trillion rupiah ($4 billion) this year, and to restore its asset sale program after scrapping a November sale of PT Bank Lippo because of low bids.
Indonesia is also raising 4.17 trillion rupiah, its biggest stock sale since November 1995, from the sale of a stake in PT Bank Rakyat Indonesia, pricing the shares at the top of a range offered to investors.
Stock Inflow
The Taiwan dollar rose after fund managers abroad yesterday bought the most stocks in almost two weeks, raising expectations of more demand for the currency.
Overseas investors purchased a net NT$10 billion ($295 million) of Taiwan's equities, the most since Oct. 17. They bought a net NT$5.6 billion today.
"The foreign inflow will drive the Taiwan dollar," said James Yang, chief dealer at the Taipei office of J.P. Morgan Chase & Co., the fourth-largest trader in the $1.2 trillion a day currency market, according to Euromoney magazine.
The Taiwan dollar gained 0.1 percent to NT$33.91, according to Taipei Forex Inc. The currency is up 0.3 percent this week.
In South Korea, the won rose 0.2 percent to 1,176.35, according to Seoul Money Brokerage Services Ltd., also on demand for stocks.
International money managers yesterday bought a net $453 million of local stocks, the most since July 8, and today purchased $33 million more than they sold.
`No Good'
The Philippine peso weakened, ending its two-day gain of 0.5 percent, on a report the House of Representatives won't withdraw its impeachment of Chief Justice Hilario Davide, raising political tension and discouraging investors.
The Supreme Court backed out of talks to resolve the impeachment issue, prompting the House to push ahead with the censure, the Philippine Star reported, citing House Speaker Jose de Venecia. The impeachment complaint will be transmitted when the House reconvenes after a break on Nov. 10, De Venecia said.
"Going ahead with the impeachment is no good for the currency," said Irene Cheung, Singapore-based Asian sovereign- debt and foreign-exchange strategist at ABN Amro Bank, the 10th- biggest trader in the daily $1.2-trillion currency market, according to Euromoney magazine. "People are putting a risk premium onto Philippine" assets.
The peso fell 0.1 percent to 55.30, according to Bankers Association of the Philippines. The currency rose in the past two days after the House adjourned, delaying the case against Davide from moving to trial in the Senate and boosting speculation lawmakers would have more time to resolve the issue.
Restriction
The House last week impeached Davide for allegedly misusing a fund meant to augment judges' salaries. Supreme Court spokesman Ismael Khan, who has denied any misuse of the fund, said there haven't been any talks to settle the dispute.
The Thai baht, little changed at 39.93, stalled gains after the central bank yesterday said it made some investment banks sell the currency below market rates because they breached the 300 million baht ($7.5 million) limit on non-resident accounts.
The central bank on Oct. 15 ordered domestic lenders to stop paying interest on some non-resident baht accounts in an attempt to put curbs on speculators betting the currency will rise.
"The new foreign-exchange rules have restricted the market," halting the baht's 7.9 percent rally this year, Cheung said.