SE Asian currency trade mixed, baht still weak
SE Asian currency trade mixed, baht still weak
SINGAPORE (Reuter): Southeast Asian currencies veered from
their recent tendency to move as a herd yesterday as several
revived despite the Thai baht being sold down.
Dealers said the baht eased on mounting perceptions that its
international bailout package might not be sufficient and talk of
renewed opposition planning for a vote of no-confidence against
the government of Prime Minister Chavalit Yongchaiyudh.
"People are shifting out of Thailand because the country's
reserves look bad and its IMF (International Monetary Fund) loan
may not be enough to bail it out of its economic troubles," a
foreign dealer said.
Dollar buying for loan repayments also affected the market,
pushing the baht below the key 34 per dollar level early in the
day. It recovered slightly to 33.98/34.04 onshore at 0950 GMT.
Offshore, the baht was at 33.90/32.00 against the dollar.
Dealers said the baht would remain under pressure from heavy
commercial demand for the U.S. unit to repay foreign loans.
Over the past few weeks, weakness in one Southeast Asian
currency spilled over into others as the market lumped them
together. But that did not happen on Monday.
Indonesia's rupiah gave up its early gains, which were driven
by relatively tight liquidity. Dealers said the market was
cautious about selling it as the prospect of tight liquidity
loomed with some central bank forward intervention transactions
last month maturing soon.
Spot rupiah was at 2,710/2,715, compared with an opening of
2,685/2,715.
The Malaysian ringgit was rangebound with most of the action
centered on the ringgit/Sing cross, with some stop-loss orders
were triggered when the cross fell below 0.5390, dealers said.
The ringgit was at 2.7710/40 to the dollar compared with its
close of 2.7640/80 in Kuala Lumpur on Friday.
Some dealers said comments over the weekend from U.S.
financier George Soros denying involvement in Southeast Asia
currency markets, would lend psychological support.
Soros also said he believed stability would return soon and
that some regional units might be due for a rebound.
The Singapore dollar firmed moderately to 1.4930/45, inspired
somewhat by its safe haven status in the wake of the baht's
slide, dealers said.
They said the Singapore dollar was still vulnerable to
selling, but the pace of sales would slacken if markets remained
wary of events in Thailand, prompting flight-to-quality buying.
In South Korea, the won hit an all-time low of 904.80 despite
the central bank's repeated intervention.
Dealers said the Bank of Korea sold dollars at 904.40-904.80
won in late afternoon trade and also offered to sell dollars in
one-month and three-month forward trading.
A Reuters poll of 10 dealers and economists produced a mid-
range forecast for the won/dollar rate of 890-895 by the end of
November.
The Philippine peso weakened slightly with most players keen
to retain dollar holdings amid continuing uncertainty in regional
currency markets. It ended at 29.895 to the dollar.
The Taiwan dollar ended stable with the central bank showing
no sign of easing its recent defence of the T$28.727 level.
The central bank said the sharp decline in its foreign
exchange reserves to US$88.77 billion at the end of July from
$90.025 billion at end June was partly due to its intervention to
support the Taiwan dollar.