Southeast Asian currencies take a dive
Southeast Asian currencies take a dive
SINGAPORE (AFP): Southeast Asian currencies fell across-the-
board yesterday amid market concern that Malaysia might renege on
its promise to shelve mammoth projects and fears that a global
financial rescue package for Thailand will fall apart, dealers
said.
Big dips in the Malaysian ringgit and Thai baht against the US
dollar dampened sentiment and pulled down the other regional
currencies as well, they said.
"Events today suggest that the road to recovery for the
regional currencies will be fraught with difficulties," Andy Tan,
general manager of U.S. research house Standard and Poor's MMS in
Singapore.
The ringgit ended sharply lower at 2.9910 against the US
dollar from Monday's close of 2.9420 amid reports that the
developer of the proposed Bakun dam in Malaysia was finalizing a
new building agreement with a foreign contractor to get the
massive project going.
Prime Minister Mahathir Mohamad and his deputy, Anwar Ibrahim,
had given repeated assurances to foreign funds that the Bakun
project costing about 15. 5 billion ringgit (US$5.34 billion)
would be shelved to avoid further widening of the nation's
current account deficit.
Malaysia's deficit at present stands at 12.3 billion ringgit,
or 5.2 percent of the country's gross national product (GNP).
"The market looks concerned by the reports because there will be
no policy consistency if Bakun goes ahead," said Jimmy Koh,
regional economist with British financial house I.D.E.A.
Other analysts said speculators also tried to chase the
ringgit to the 3. 0000 level against the greenback.
Tan of MMS said: "I think if the U.S. dollar breaks above the
3.0000 level against the ringgit, then the ringgit will be at
risk to test its recent (record) lows against the US and
Singapore currencies."
The ringgit's plunged to a record low of 3.0520 against the
U.S. dollar and dived to a record low of 0.4972 against the
Singapore dollar earlier this month.
The baht ended at 35.54 against the U.S. dollar from Monday's
close of 35.18 after a leading Hong Kong newspaper reported that
the International Monetary Fund (IMF) might withdraw a US$17.2
billion financial rescue package to Thailand if it did not
proceed with rapid financial reforms.
"The report sent the baht down against the dollar and most
other Southeast Asian currencies followed suit," said Alison
Seng, an analyst with MMS here.
The reforms being pushed by the IMF as part of global aid
package included streamlining of Thailand's financial sector,
which has been reeling since the baht was floated on July 2 and
triggered off regional currency turmoil.
The Indonesian rupiah closed at 2,948/52 against the U.S.
dollar from Monday's opening of 2,930/38 as Jakarta announced it
would reschedule Rp 3.27 trillion (US$1.1 billion) worth of
budgeted projects.
The Philippine peso ended lower at 32.40 against the US dollar
from Monday's close of 32.26 as Philippine central bank governor
Gabriel Singson moved to assure foreign investors that Manila
would not resort to investment and foreign exchange controls.
"Let me also assure you that we have never even considered
imposing restraints on the repatriation of foreign investments or
the servicing of legitimate foreign exchange obligations,"
Singson said in a speech to the European Chamber of Commerce in
Manila.
The Singapore dollar also ended lower at 1.5135 against the
greenback from Monday's close of 1.5115.