Rupiah weaker, peso at new all-time low

Rupiah weaker, peso at new all-time low

SINGAPORE (Dow Jones): The Indonesian rupiah was lower against the dollar on rising corporate demand for the U.S. currency to repay foreign debts, while the Philippine peso extended its precipitous decline to yet another record low late Wednesday, dealers said.

Except for the New Taiwan dollar, which was flat, and the Singapore dollar, which was slightly stronger, the other Asian currencies were slightly lower.

The dollar closed at Rp 8,845 in Asia, up from Rp 8,825 late Tuesday.

Dealers said state banks were buying dollars to repay offshore obligations maturing at the end of the year. Foreign banks in Jakarta were also buying the U.S. currency, taking a lead from the dollar's rise against the peso.

"In few days local companies may follow suit buying the dollar to repay their offshore debts," said a dealer with a foreign bank.

Bank Indonesia said last week around $16 billion of corporate foreign debts will mature during the last quarter of the year.

This is expected to continue weighing on the rupiah unless local exporters sell their dollars, dealers said.

Trading is also thin as the market eyes a meeting between the Indonesian government and international lenders next week in Tokyo, during which Indonesia will ask for $4.8 billion in loans.

Dealers expect the dollar to trade between Rp 8,825 and Rp 8,875 Thursday.

The Philippine peso's relentless freefall to another historical low provoked intervention by the local central bank, helping the beleaguered currency close off its all-time low of 47.350 pesos against the dollar, dealers said.

The dollar closed at 47.315 pesos on the Philippine Dealing System, up from Tuesday's close of 46.890 pesos.

The threat of impeachment proceedings against President Joseph Estrada, who has been accused of accepting kickbacks from underground gambling lords, has rattled the market, dealers said.

Barclays Capital said in a report that its current year-end forecast of 48 pesos to the dollar "is in danger of being achieved a couple of months early," with the fiscal deficit "showing no sign of narrowing."

The Thai currency had early in the day sunk below the psychologically important support level of 43 baht against the dollar.

Around 0940 GMT, the dollar had slipped back below 43 baht on profit-taking, to trade at 42.970 baht, up from 42.875 baht late Tuesday, dealers said.

The dollar had risen to as high as 43.150 baht early Wednesday, its highest level since June 1998.

The Singapore dollar, which largely mimicked the baht's movements, showed more resilience throughout the day.

The U.S. dollar was at S$1.7490, down from S$1.7502 late Tuesday.

In Northeast Asia, the dollar finished at 1,121.40 won, up from Tuesday's close of 1,119 won.

The New Taiwan dollar was little changed as central bank intervention cushioned the blow from a steep fall on the local stock market and strong demand for the U.S. currency from importers, dealers said.

The U.S. dollar closed at NT$31.298, compared with Monday's close of NT$31.301. Taiwan's financial markets were closed Tuesday for a national holiday.