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.