SE Asian currencies drop to fresh lows
SE Asian currencies drop to fresh lows
SINGAPORE (Reuter): Southeast Asian currencies continued to make fresh lows on a minute-by-minute basis yesterday with sentiment about as poor as it gets, traders and analysts said.
Despite an absence of fresh factors, corporate investors remained hungry for U.S. dollars and the prospects of slowing economic growth throughout the region means overseas investors are staying clear of the region, or taking any remaining funds out.
The Malaysian ringgit, Indonesian rupiah and Philippine peso all made new lows while the Thai baht, which sparked the regional turmoil in the first place, was relatively steady.
Month-end dollar demand and thin trading volumes as Japanese banks and institutions close books for the financial half year has worsened the plight of the region's currencies, dealers said.
They said the ringgit continues to lead the way lower and comments from Malaysian Prime Minister Mahathir Mohamad again damaged sentiment.
Mahathir told a trade forum in Santiago on Monday that the fall in the ringgit would cause economic growth to slow in 1998.
"The ringgit is looking very weak at the moment and should hit 3.25 very soon," said a dealer with a Malaysian Bank.
He said 3.30 per dollar could be on the cards, but some were more negative and one Singapore analyst is targeting 3.40.
The ringgit made a fresh low of 3.2550 in mid-afternoon trading, nearly two percent down on Monday's Asian close.
The Indonesian rupiah recovered from a new record low of 3,290 to the dollar, but dealers said domestic corporate demand for dollars would keep the pressure on.
The rupiah was at 3,270 against an opening 3,210.
"The rupiah was attacked because of the haze last week. The dollar will be bought on any dips against the rupiah and ringgit," a European bank dealer in Singapore said.
Raging bush fires on Sumatra and in Kalimantan in Indonesia have blanketed vast tracts of Southeast Asia in a blinding and health-threatening smog for weeks.
The Philippine peso sagged to a new low of 34.38 to the dollar in thin trade as currency weakness elsewhere in the region prompted locals to take more dollars on board.
In late business the peso was at 34.35 against Monday's 33.99 close.
The Thai baht also edged lower but was still well shy of its record low of around 38.30 per dollar reached on Sept. 4. The onshore rate jumped to 36.30 immediately after a swathe of economic figures after, earlier sinking to 36.80.
There was good news on the reserves front with foreign reserves up at $28.4 billion as at September 15, compared with $25.9 billion on August 29.
But this rise reflected Thailand's tapping of a bailout loan from Japan's Export-Import Bank. A Japanese central bank official had already said the EXIM Bank disbursed about $1.6 billion in early September.
Only the Singapore dollar escaped relatively unscathed on cross sales of the ringgit for Singapore dollars and persistent talk of U.S. dollar selling interest by oil-rich Brunei.
The ring/sing cross was at 0.4725 in late business, down sharply from 0.4780 in earlier trading.
The Singapore dollar was at 1.5318 to the U.S. dollar, little up on late Monday levels.