Thai gloom hangs over regional currencies
Thai gloom hangs over regional currencies
SINGAPORE (Reuters): Thailand's political and financial
uncertainties haunted Southeast Asian currencies yesterday,
dealers said.
Political tension resurfaced to grip Thailand's financial
markets after the resignation of its Finance Minister Thanong
Bidaya on Monday, sparking street protests calling for Prime
Minister Chavalit Yongchaiyudh to step down.
"The anti-Chavalit protests and demonstrations are coming at a
bad time when the country is trying to regain investors'
confidence. Any resignation is going to send the baht tumbling
and regionals as well, due to the close links Southeast Asia
has," said a dealer with a U.S. institution.
The Thai baht plunged to a new record low of 38.29 to a dollar
in early trade.
Offshore the baht was at 38.35/45 a dollar at 0430 GMT against
37.67/37.77 a dollar. Deals were at 38.29, dealers said.
The Indonesian rupiah was not spared the gloom nagging
Thailand. Spot rupiah was range-bound at 3,630.00/5.00 against
the dollar on Tuesday morning, a day after the central bank eased
rules to improve liquidity.
Dealers said the rupiah was mixed as some offshore players
absorbed the news by selling dollars, while others interpreted it
as a chance for further rupiah weakening.
A bearish cloud continued to hover over the Malaysian ringgit,
with dealers expecting it to test 3.4000 to a dollar in the next
one to two weeks.
"There is still more downside room for the ringgit. The post-
budget excitement is over and regional gloom, led by Thailand,
has taken over again," said the dealer with a Japanese bank.
At 0430 GMT, the ringgit was at 3.3300/50 to the dollar.
A survey of 18 dealers and research houses in Singapore and
Malaysia on Monday forecast the ringgit to end the year at a
median 3.37 to a dollar.
The Singapore dollar fell to a 42-month low of 1.5740 to the
U.S. unit in early trading yesterday, dealers said.
North Asian currencies mirrored Southeast Asian woes, with the
South Korean won and Taiwan dollar hitting record lows.
The won reached a historic low of 924.90 to the dollar,
triggering two interventions by the central bank to ease its
plunge.
The won was spooked by fears of financial market turbulence
following a chain of corporate defaults, bad debt and foreign
investors' exodus, dealers said.
The Taiwan dollar also fell against the U.S. unit as investors
grew nervous ahead of a summit meeting between China President
Jiang Zemin and U.S. President Bill Clinton.
The Taiwan dollar was at 30.530/630 to the dollar at 0430 GMT.
Crisis -- Page 10