SE Asian currencies revive as KL backs off
SE Asian currencies revive as KL backs off
SINGAPORE (Agencies): Southeast Asian currencies were lifted
yesterday after Malaysia's reversal of a week-old decision to
curb short-selling of blue-chip stocks brightened sentiment.
The benchmark Kuala Lumpur stock index ended up 12.37 percent
at 821.59, racking up its biggest single-day gain since January
1994.
The share market strength helped the ringgit shoot to a high
of 2.9270 per dollar in early trade before slipping off again. It
was quoted at 2.9310/90 at 0945 GMT against 3.0340/90 late on
Thursday.
"The move on the KLSE (Kuala Lumpur Stock Exchange) was viewed
as very positive by offshore players," said Maya Pinto, regional
economist at I.D.E.A.
She said the ringgit would remain volatile, but it was not
likely to head back towards Thursday's low of 3.05 in a hurry.
Analysts said the regional units were not out of the woods yet
despite their first collective rise against the greenback since
foreign exchange turmoil erupted in the region with Thailand's de
fact devaluation of its currency on July 2.
"The road ahead for the regional currencies is still paved
with numerous obstacles. It hinges on how they address their own
underlying economic problems," warned Andy Tan, general manager
of U.S. research house Standard and Poor's MMS in Singapore.
The Philippines stressed yesterday that it would allow market
forces to determine the level of the peso, which was effectively
devalued after the baht, but will use effective monetary policy
to avoid a freefall.
Low said more of these "encouraging signals" would draw back
foreign investors and restore confidence in the regional
economies.
The Thai baht rose as concerns about whether parliament would
approve a new draft constitution subsided, on the second day of
debate.
The baht was at 36.95/37.20 to the dollar onshore from
37.50/37.80 late on Thursday. It was at 35.20/50 offshore.
"The baht's rebound is in line with other currencies in the
region. The market's concern about the constitution debate is
also easing," a foreign bank dealer in Bangkok said.
Politicians opposed to the reforms, which call for a revamp of
the political system and an end to money politics, appeared to
tone down their stance yesterday after top financial and military
officials expressed support for the new constitution.
Finance Minister Thanong Bidaya said on Thursday uncertainty
on how the debate would end had kept the baht near its new record
low of 38.30. "Whether the baht will stop falling will depend on
whether political problems will ease," he said.
The Indonesian rupiah held up well as the market was heartened
by the government's austerity package. The rupiah was at 2,970/80
to the dollar against 3,035/45 late on Thursday.
"The rupiah strengthened because of overnight gains in New
York and also because of a recovery in the ringgit," a local bank
dealer in Jakarta said.
The Philippine peso finished firmer at 32.365 against
Thursday's 32.38 close after the central bank intervened to sell
an estimated $18-$25 million at 32.305 and 32.3075 pesos.
The South Korean won remained weak in anticipation of dollar
demand for importer deals due at the weekend and next week.
The central bank sold dollars at between 908.20 and 907.00 won
just before the end of trading to curb the won's fall.