SE Asian currencies end steady in S'pore trade

SE Asian currencies end steady in S'pore trade

SINGAPORE (AFP): Southeast Asian currencies ended steady in
Singapore trade yesterday as the market waited for fresh factors
to emerge while trying to digest an IMF rescue plan for the Thai
economy, dealers said.

The U.S. dollar ended lower at 30.80 Thai baht compared to
31.70 at Tuesday's close after the Thai cabinet approved painful
measures stipulated by the International Monetary Fund (IMF).

The Malaysian ringgit ended off its lows against the greenback
while the Indonesian rupiah strengthened.

"The baht appreciated a bit because at this stage, nobody
would like to be caught short on baht while they wait for the
package to be implemented," said a dealer with a European finance
house.

Analyst David Cohen at MMS International, a unit of U.S.
credit-rating agency Standard and Poor's, said the market
continued to evaluate the implications of the IMF package.

He said the announcement of cabinet approval for the package,
including a credit line of US$12-to-15 billion aimed at reviving
Thailand's ailing economy, had no immediate impact on the
foreign-exchange market.

But analysts have predicted that the baht, which has fallen by
as much as 29 percent against the greenback since its de facto
devaluation on July 2, could weaken by another 10 percent as the
measures prescribed by the IMF take effect.

The operations of another 42 finance companies have been
suspended on top of 16 closed at the end of June, the Thai
government announced Tuesday, at the same time as it announced
higher taxes and promised to curb spending as part of the IMF
deal.

Regional currencies have been under pressure from speculators
since the Thai baht's devaluation raised the exchange-rate risk
profile of all of Southeast Asia.

The baht's weakness has been setting the lead for other
regional currencies.

"The market is playing within a range. It is awaiting fresh
factors," said Ishak Ismail, a market intelligence analyst at
British finance house I.D.E.A.

He said the dollar's "topside" against the baht was for the
moment limited at 31.50 and the "downside" at 30.70.

Ismail said the foreign exchange market had failed to react
immediately to the IMF announcement mainly because it had already
factored in the conditions that accompanied the rescue plan.

Against other Southeast Asian currencies, the dollar rose to
around 2.6410 Malaysian ringgit in intra-day trading here from
2.6330 at the previous day's close, and fell a shade to 2,589
Indonesian rupiah from 2,595, dealers said.

It ended the day at 2.6345 Malaysian ringgit, which benefited
from dollar-selling by British houses, and 2,585 Indonesian
rupiah, they said.

The greenback ended at 1.4710 Singapore dollars from Tuesday's
finish of 1. 4665.

Ismail said the ringgit was initially under pressure following
news that Malaysia had posted a trade deficit of 2.8 billion
ringgit in June, reversing a surplus in the previous month.

Market talk that Indonesia may follow a Malaysian example and
impose capital controls strengthened the rupiah.

In a bid to check excessive speculation, Malaysia's central
bank on Monday implemented new regulations limiting non-
commercial swaps to two million U.S. dollars per foreign
customer. Swaps allow a company to exchange the currency it holds
in return for another it needs.