SE Asian currencies await finance talks
SE Asian currencies await finance talks
SINGAPORE (AFP): Southeast Asian currencies ended mixed against the U.S. dollar yesterday with bearish sentiment prevailing ahead of the Group of Seven (G-7) and global financial meetings in Hong Kong.
Trading was subdued as Southeast Asian finance ministers, meeting with European counterparts in Bangkok before descending upon Hong Kong, froze a proposal to create a regional currency rescue fund.
The Malaysian ringgit was the softest of the regional currencies Friday, closing at 3.0225 to the dollar from 3.0145 the day before, with dealers expecting it to weaken further toward the end of the year. It hit a low of 3. 0420 during the day.
The ringgit fell as Malaysia renewed its attacks on foreign speculators it has been blaming for its financial woes. Deputy Premier and Finance Minister Anwar Ibrahim, speaking in Bangkok, likened them to "financial gunslingers."
"Importer dollar demand was one reason for the dollar-ringgit going up," said Maya Pinto, regional economist with British finance house I.D.E.A.
"Today being a Friday there was quite thin trading and offshores are loading up on dollars," she said. "Next week they are expecting the recent ringgit lows to be tested again."
The Thai baht enjoyed a boost from the International Monetary Fund (IMF), holding steady at 35.75 to the dollar from 35.775 the day before, despite a possible widening of a downgrade of its credit ratings.
IMF managing director Michel Camdessus expressed "great confidence" Friday over the prospects of an IMF-engineered rescue program for Thailand after a meeting with Thai Premier Chaowalit Yongchaiyudh in Bangkok.
The Philippine peso, which had touched a new all-time low of 34.05 against the dollar Thursday, rebounded to 33.31 Friday on the back of a 3.4 percent rise in the stock market.
The Indonesian rupiah, infected by the ringgit's weakness, ended lower at 2,980 from Thursday's close of 2,968.
The Singapore dollar, which was affected Thursday by Prime Minister Goh Chok Tong's speech in Chicago about lower regional growth prospects, ended unchanged at 1.5178 after falling earlier Friday with the ringgit.
G-7 members Britain, Canada, France, Germany Italy, Japan, the United States, are expected to discuss the Southeast Asian financial crisis, triggered by the July 2 de facto devaluation of the Thai baht, when they meet Saturday ahead of next week's annual meetings of the IMF and World Bank.
Song Seng Wun, regional economist with ABN Amro Hoare Govett Securities in Singapore, said a show of support from global financial powers in Hong Kong could provide some relief to Southeast Asian currencies.
"But the problem is that the present weakness in the currencies is so pronounced and sentiment is so weak that it would need a big boost of some sort to even reverse the trend," he said.
"What they have to do is make some noises on behalf of the regional currencies," he said. "That might help lift the sentiment a little bit, but how sustainable that is remains to be seen."
The baht was stable despite a statement from credit rating agency Moody's Investors Service that it had added its Prime-2 short-term ratings for foreign currency notes, commercial paper and bank deposits to the review of Thailand's A-3 long-term ratings ceiling.
In a statement, Moody's said the review with possible downgrade will focus on "Thailand's prospective policy response to its present difficulties."
Also affected by the latest rating action are Bangkok Bank plc, Government Housing Bank, Industrial Finance Corp of Thailand, Krung Thai Bank plc., Siam Commercial Bank plc. and Thai Farmers Bank plc.
Dealers said domestic politics in the Philippines and Thailand could swing the market next week.
Critics led by former Philippine president Corazon Aquino have called for a mass rally on Sunday to express indignation over proposed changes to the Philippine constitution, seen as an attempt to extend President Ramos' term.
Thai premier Chaowalit is facing a no-confidence motion in parliament sought by critics of his allegedly inept handling of the country's worst economic crisis in decades.