SE Asian currencies lose footing again
SE Asian currencies lose footing again
SINGAPORE (Reuter): Southeast Asian currencies slid again yesterday as Malaysia's planned measures to cut a yawning current account deficit left the market uninspired.
Finance Minister Anwar Ibrahim's eagerly anticipated announcements on Wednesday night were quickly dismissed by the market as short on specifics.
The regional mood was worsened by worries over a delayed vote on Thailand's new draft constitution and sharp falls in regional stock markets, partly triggered by Wall Street's overnight drop.
The Malaysian ringgit was hit worst, falling to a low of 2.9550 to the dollar on selling by U.S.-based banks and a U.S. investment house and the weakness spread to other currencies.
Anwar announced delays in some public and private sector projects and said the government expected the current account deficit to be cut to five percent of Gross National Product this year and to four percent in 1998. It was 5.5 percent in 1996.
"No solid, concrete news came out of it so the market went back to buying the dollar," a European bank dealer in Singapore said. "The turmoil is not over. The stock market is still looking ugly. I would buy the dollar on dips," she said.
The ringgit was at 2.9350/400 at 0905 GMT against 2.9220/70 late on Wednesday. The key Kuala Lumpur stock index lost 3.35 percent to end the day at 834.17 points.
"The focus is still on how the current account deficit cut is going to be achieved despite the delay of mega projects. I would see the market pushing dollar/ringgit to 2.9670," said Ishak Ismail, market intelligence analyst at I.D.E.A.
In Thailand, players turned cautious after the coalition government ended debate on a new draft constitution by defeating an opposition proposal for a quick vote on the controversial charter, which aims to put an end to money politics.
Participants were also still troubled by a Moody's announcement on Wednesday that it had placed Thailand's A3 long- term foreign currency ceiling for bonds and notes on review for possible downgrade.
Thai Finance Minister Thanong Bidaya said he saw no major impact from the Moody's decision as the world had already discounted Thai economic problems.
The baht's weakness was limited by exporter dollar sales in Thailand after the government cut their maximum dollar holding period to 120 days from 180 days.
The baht was at 35.35/55 to the dollar onshore against 35.40/35.60 late on Wednesday. It was at 34.30/50 offshore against 34.15/34.25.
The Indonesian rupiah was hit by weakness in the ringgit, easing to 2,935/38 against an opening 2,915/25.
"I think we are tracking the ringgit. You see almost the same pattern in the chart," a state bank dealer in Jakarta said. Indonesian Planning Minister Ginanjar Kartasasmita said the rupiah was approaching its new equilibrium.
The Singapore dollar fell through the 1.51 to the U.S. dollar level again as players covered short positions in the face of persistent U.S. dollar buying by local banks.
"If the local (banks) were not buying dollar/Sing, it could have gone to 1.49 because the selling pressure was very heavy at the beginning of this week," the European bank dealer said.
Political worries hit the Philippine peso, which slipped to 32.30/50 to the U.S. dollar from Wednesday's close at 32.
The market fretted over efforts by supporters of President Fidel Ramos to amend the constitution, which limits him to one six-year term, and an ensuing row with the church, dealers said.
The South Korean won shrugged aside the gloom and edged up as exporters rushed to secure won funds to prepare for the September 15-17 autumn harvest celebrations.
The won ended at 908.70, up from Wednesday's 908.90.