Southeast Asian currencies end mixed

Southeast Asian currencies end mixed

SINGAPORE (Dow Jones): Southeast Asian currencies were mixed
against the U.S. dollar in late trade on Friday, after a mid-
session surge by the yen to 111.40 against the U.S. currency.

"The dollar was falling until the market heard the Bank of
Japan was making inquiries into the market and that was the end
of that," as the dollar's slide halted, said a trader at a U.S.
bank in Singapore.

In late trading, the U.S. dollar was trading at 111.99 yen,
well down from 113.77 yen late Thursday.

While the Singapore dollar, New Taiwan dollar and South Korean
won strengthened, the Thai baht and Philippine peso flagged
against the U.S dollar. The Indonesian rupiah is generally flat.

The fortunes of the Singapore dollar - slated by many
economists to be S$1.75 to S$2 to the U.S. dollar this year -
once again looks subject to developments in Malaysia, where a
graduated levy of between 0.0 percent and 30 percent on capital
repatriation by foreigners has now been introduced.

Malaysia introduced a variety of capital controls and pegged
the ringgit at 3.8 ringgit to the U.S. dollar last September.

"As far as anyone knows, the MAS (Monetary Authority of
Singapore) treats the ringgit as a regularly tradable currency
when calculating its trade-weighted (Singapore) dollar," said
Kate O'Donoghue, regional economist at Barclays Capital in
Singapore.

Although the Malaysian government has repeatedly said it would
not repeg its currency unless regional currencies moved either up
or down 20 percent from current levels, the feeling of traders
and economists is that any move to float the ringgit this year
would see an immediate appreciation of the ringgit.

That would have a negative effect for any investors short
Singapore dollars," as the value of the Singapore dollar would
appreciate in line with the ringgit, said a trader. However, he
believes any ringgit appreciation would be followed by
depreciation. "You only have to look at how banks have been
forced to lend and how government measures have done nothing to
strengthen the financial sector. And despite a fall in interest
rates, the economy appears to be stagnant. To get the economy
moving again, a weaker ringgit would have to be a goal of the
government."

In late trading, the U.S. dollar was trading at S$1.6857, down
from S$1.6904 late Thursday, as the republic's currency follows
the movement in the yen, traders said.

The U.S. dollar was also trading at Rp 8,720, almost unchanged
from 8,700 late Thursday, following Japan's decision to give $2.4
billion to Indonesia from its $30 billion Miyazawa fund for
troubled Asian countries.

The U.S. dollar was also trading at 36.73 baht, down a touch
from 36.7450 baht late Thursday, with traders once again
ascribing the baht's strength to the rise in the yen.

Traders said a lack of fresh news out of Thailand has kept the
baht range-bound, despite comments by Thailand's Justice Ministry
Thursday that a new bankruptcy court could be up and running by
April if the senate gives final approval to relevant legislation
next week.

"If the bankruptcy laws and court process proves tenable -
something we haven't seen proof of in Indonesia to date- then the
fear asset market sell-off people are predicting to happen might
not materialize; and future asset auctions may get a better
reception," said a currency strategist at a U.S. investment bank
in Singapore.

He cautioned that there is little upside in store for the baht
because the government is keen to keep its export sector, which
has been flagging, buoyant.

The U.S. dollar was also trading at 38.64 pesos, up from 38.53
pesos Thursday. Traders said rumors that poorer-then-expected
inflation figures for January damped sentiment for the peso.

In North Asia, the U.S. dollar continued to lose ground to the
New Taiwan dollar, trading at NT$32.239, down from NT$32.261 late
Thursday.

The U.S. dollar was also trading at 1,170.1 won, down a touch
from 1,170.3 won Thursday.