SE Asian monies higher as rupiah sentiment brightens

SE Asian monies higher as rupiah sentiment brightens

SINGAPORE (Dow Jones) Fund inflows lifted Southeast Asian
currencies higher against the U.S. dollar Monday, as offshore
investors maintained their bullish stance towards the region.
Even the rupiah -- long shunned as a pariah currency -- benefited,
rising to its highest level in 16 weeks as market players poured
money into Indonesian assets.

The Thai baht and the Philippine peso also ended Asian trading
higher, bolstered by buying interest in the offshore market. The
one currency to miss out on the regional trend was the Singapore
dollar, which ended Asian hours flat on the day, despite an
upwards revision to the government's official growth forecast for
1999.

Activity in North Asia was more subdued. Both the South Korean
won and the New Taiwan dollar ended little changed on the day as
market players, fearful of central bank intervention, held back
from buying into the local currencies.

Despite a lack of activity caused by the closure of several
regional and major markets for holidays on Monday, overall
sentiment toward Asian regional markets remained undimmed.

Indonesia, which in recent months has lagged behind the rally
in other Asian markets, attracted some of the heaviest investment
flows, said dealers.

"There really is good genuine demand for rupiah from
investors. There are a lot of funds going into the Jakarta stock
market," said one rupiah trader at a U.S. bank in Singapore as
the Jakarta Composite stock index added nearly 5 percent on
Monday, leaving it up by more than 30 percent over the year to
date.

Accelerating sales of U.S. dollars for rupiah had earlier
pushed the U.S. currency below the Rp 8,000 level for the first
time since mid-January. By the end of Asian trading the U.S.
dollar had dropped to Rp 7,940, down from Rp 8,230 late on
Friday.

Despite the IMF official's bullish outlook, some foreign
exchange traders questioned the rupiah's potential to make
further gains in the near term.

According to traders at one U.S. bank in Singapore, offshore
clients have already begun selling rupiah to take their profits
from the currency's recent gains. At the same time dealers report
heavy purchases of the U.S. currency by banks in Jakarta taking
the opportunity to acquire cheap dollars.

In the short term, the U.S. dollar is likely to find some
support at Rp 7,800, while Rp 7,500 should prove a formidable
psychological barrier, said a rupiah trader at one U.S. bank in
Singapore.

Among other regional currencies, the Thai baht and the
Philippine peso both rose on Monday, with the baht hitting its
highest level since mid-February.

Traders in Singapore, however, warned that the baht's rise,
which saw the U.S. dollar pushed below the 37.00 baht, had been
exaggerated by the closure of the domestic foreign exchange
market for a holiday on Monday.

Demand for the U.S. currency from onshore corporate clients is
likely to re-emerge on Tuesday, offsetting the demand for baht
from foreign investors and potentially reversing Monday's slide
in the U.S. dollar, they said.

Late on Monday the U.S. dollar was quoted in Singapore at
36.9850 baht, down from 37.2350 baht towards the end of Asian
trading on Friday.

The Philippine peso also ended higher, as the local stock
market continued to attract foreign investors. The market reacted
positively to the central bank's latest cut in its benchmark
borrowing and lending rates - its 12th so far this year.

At the close of local trading, the U.S. dollar was quoted at
37.815 pesos, down from 37.989 pesos on Friday.

The bullish tone in regional markets failed to lift the
Singapore dollar, however, despite the weekend's upward revision
of the government's 1999 growth forecast to 0 percent to 2
percent from -1 percent to 1 percent previously.

After being sold to a low of S$1.6960, the U.S. dollar was
pushed to a high of S$1.7050 in thin trading by buying from local
banks before it finally settled at S$1.7005. Late on Friday the
U.S. dollar was quoted at S$1.7030.

In North Asia both the South Korean won and the new Taiwan
dollar were little changed on the day, with the won finishing
down slightly, and the new Taiwan dollar edging higher.

Trading in the won was generally subdued following the
government's announcement on Friday of a $4.6 billion package of
intervention measures designed to hold down the won and safeguard
the competitiveness of Korea's exports.

At the close of domestic dealing, the U.S. dollar was at
1,190.10 won, up just a fraction from 1,188.00 won at Friday's
close.

Against the Taiwanese currency, the U.S. dollar ended at
NT$32.686, down marginally from NT$32.688 on Friday on moderate
trading volume.