Southeast Asian currencies lose ground

Southeast Asian currencies lose ground

HONG KONG (Dow Jones): Southeast Asian currencies in slipped back in quiet trading on Thursday as market players covered their short positions in the U.S. dollar ahead of the month's end.

The rupiah continued to slip in response to increased sniping about the makeup of Indonesia's new cabinet, which just two days previously had been hailed as an artful political compromise. Toward the end of Asian trading, the U.S. dollar had climbed to Rp 6,945, up from Rp 6,860 the day before.

Both the Singapore dollar and the Thai baht also fell back as dealers covered their short positions in the U.S. dollar.

Late in Asian trading, the U.S. currency was quoted at S$1.6691, up from S$1.6682 the previous day.

Against the baht, the dollar was at 38.8150 baht, compared with 38.7500 baht on Wednesday.

The Philippine peso, too, lost ground, with the dollar remaining well above the 40.000 pesos mark, after central bank governor Raphael Buenaventura promised a 25-basis-point cut in the central bank's key overnight borrowing rate.

At the close, the U.S. dollar was at 40.210 pesos, up from 40.005 pesos at the end of Wednesday's session.

The release in Seoul of strong economic data for September underlined the power of Korea's economic recovery and helped drive the won higher, as the U.S. dollar dropped to close below the psychologically significant 1,200 won.

Elsewhere the Taiwanese central bank, facing heavy trade and investment inflows, allowed the New Taiwan dollar to continue inching upward toward its highest level in two years.

Data released Thursday illustrated the magnitude of the upward pressure on the won, as a booming export sector brought South Korea's current account surplus for the first nine months of the year to $19.16 billion.

Although that figure represents a decline of 40 percent compared with the equivalent period last year, the surplus remains strongly won-supportive.

At the same time analysts interpreted the fall favorably for Korea, saying the sharp rise in imports seen in 1999 emphasizes the recovery in the domestic economy.

That view was supported by data showing that wholesale and retail sales were up by an impressive 14 percent in September, compared to the previous year.

Despite the fundamental upward pressure on the won, dollar buying by the authorities, which have now built up foreign currency reserves of nearly $65 billion, limited the local currency's gains.

At the close of trading in Seoul, the U.S. dollar was quoted at 1,199.70 won, compared with 1,200.60 won at the end of Wednesday's session.

The New Taiwan dollar also edged higher Thursday, with the U.S. currency dropping to NT$31.737 in intraday trading, its lowest level since early December 1997.

By Thursday's close the U.S. dollar had lifted off its earlier low to end the session at NT31.743, down from NT$31.747 the day before.