SE Asian regional currencies sag anew at month end

SE Asian regional currencies sag anew at month end

SINGAPORE (Reuter): Southeast Asian currencies sagged anew in
late business yesterday with a swathe of economic data from
Thailand having no real impact on the baht or overall sentiment
in the region.

Analysts said while the baht has been setting the trend in
regional currencies of late, an awful lot of bad news from
Thailand has already been discounted.

"A lot of bad news has been pretty much factored in, I don't
think the figures will have a great deal of overall impact," said
Chiang Yao Chye, head of Asia Pacific research at CIBC in
Singapore.

The Thai overall balance of payments deficit in June was 24.6
billion baht, compared with May's 112.3 billion shortfall.
Foreign reserves stood at US$32.4 billion after $33.3 billion in
May.

Exports rose for the third month in a row, seen as good news
suggesting that the economy at the time was doing quite well,
analysts said.

"But going forward the lower baht probably will not have too
much impact on exports and I don't see any benefit before next
year at the earliest," CIBC's Chiang said.

The market had expected a reserves figure of $25 to $31
billion so the actual number was at the better end of
expectations and indicated the central bank had not spent as much
as expected defending the baht in the spot market in June.

But a lot of intervention could have been done in the forward
market so it remains to be seen if future numbers reveal some
much bigger falls, analysts said.

"There were some pretty bad numbers being bandied about on the
reserves so it didn't look as bad as it could have done," said
one European bank trader in Singapore.

"Mind you, it hasn't had any impact whatsoever. Things have
been pretty thin today because it's the end of the month and
people are waiting for the package."

Thailand's economic package is due to be published before Aug.
5, although most in the market expect it to be announced on that
day. If, as expected, the package includes credit lines from the
International Monetary Fund (IMF) it will be taken extremely well
by the market, analysts said.

The baht slipped but recovered from early dollar purchases
from importers and corporates. The onshore rate was at a late
31.700/950 after a 31.100 low and 31.900/32.10 late Wednesday.

"Now with Thailand seeking funds from IMF and having to obey
fresh international conditions with regards to its economy, there
is a fresh excuse of regional instability for the punters," a
dealer at a Malaysian bank said.

The Malaysian ringgit lost its footing again as hedge funds,
which were booking profits on the dollar on Wednesday, started
dumping the ringgit yet again.

It stood at a late 2.6925/15 compared with 2.6260/90 on
Wednesday. Dealers said some demand for the ringgit/Singapore
dollar cross will provide a temporary cap to dollar/ringgit.

The Singapore dollar was at 1.4685/95 to the U.S. dollar
against 1.4667/77 late on Wednesday and in Indonesia, the rupiah
slithered back to the 2,600 level.

"It's regional rather than rupiah trading. You have to look to
other currencies in the region before you can have a view on the
local market," a local bank dealer in Jakarta said.
Spot rupiah was at 2,600 against a previous 2,582.00.

The Philippine central bank sold dollars at 29 pesos in early
trade and Manila traders said the peso would remain on the
defensive despite a new ruling cutting banks' long dollar
positions to five percent of capital from 10 percent.

The Taiwan dollar remained under the gun after opening sharply
lower as the U.S. dollar held its strong across the board. The
Taiwan dollar closed at a fresh nine-year low of T$28.678/698
against Wednesday's late 28.480.

In late news from Taiwan the central bank said it was raising
two key money market rates to help stabilize the foreign exchange
market.