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.