Singapore dolar up after MAS action

Singapore dolar up after MAS action

HONG KONG (Dow Jones): Asian currencies had a mixed day
Thursday. With regional markets in Thailand and Indonesia closed
for holidays, activity was muted.

The Singapore dollar ended local dealings significantly
higher, after the Monetary Authority of Singapore (MAS)
intervened in the market during London trading hours Wednesday,
selling U.S. dollars in support of the local currency, according
to dealers.

Over the preceding days market players in Singapore had built
short positions in the U.S. currency in anticipation of MAS
intervention to maintain the exchange rate within its intended
trading band.

The attempt was partially successful, driving the dollar up to
levels around S$1.7225 Wednesday in London before the MAS entered
the market.

The intervention pushed the U.S. dollar rapidly below
S$1.7150, a level from which the exchange rate barely deviated
through Asian trading Thursday, as market participants remained
nervous of provoking further official action.

Late Thursday in Asia the U.S. dollar was quoted at S$1.7156,
down from S$1.7185 at the same time the day before.

Other Southeast Asian markets were quiet Thursday. Fear of
official intervention to support the Philippine peso kept the
dollar below its six-month high of 41.200 pesos.

At the close of local trading the U.S. currency was quoted
against the peso at 41.120 pesos, down from 41.130 pesos the
previous day.

With markets in Jakarta and Bangkok closed for local holidays,
offshore volumes in the rupiah and the baht were extremely thin.

Sentiment toward the rupiah remained poor, however, after the
International Monetary Fund (IMF) last week postponed the
disbursement of its latest tranche of assistance funding. The
delay has raised market fears that Indonesia may fail to clinch
an agreement at its April 12 meeting with the Paris Club of
sovereign creditors.

Analysts at Standard Chartered Bank warned the Indonesian
currency remains vulnerable after falling to its lowest level
since mid-October on Wednesday, when the dollar was bid up to hit
Rp 7,800.

Analysts at Bank of America added that a deal on debt
restructuring is urgently needed, together with a resumption of
lending to Indonesia.

"The rupiah is likely to retain a weak tone in the short term,
due to consistent corporate demands for dollars to repay debts,"
they wrote in a research note, which cautioned that the dollar
may rise to Rp 8,000 "earlier than expected."

Near the end of Asian hours the dollar was quoted in the
offshore market at Rp 7,785, unchanged from late the previous
day.

Against the baht the dollar was slightly higher at 38.135
baht, up from 37.995 baht the day before.

"The dollar is still looking bid," commented one broker.

In North Asia the New Taiwan dollar ended a touch lower as
foreign investors unloaded local stocks, partly in response to
technology sector volatility and partly on fears that the
government is to begin to liquidate its holdings of local
equities.

At the close the U.S. dollar was at NT$30.469, up marginally
from NT$30.465 the day before.

The South Korean won gained ground, however, with the dollar
easing to close at 1,112.00 won, down from 1,113.70 won Tuesday.
The Seoul market was closed Wednesday for a holiday.