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.