Won, Taiwan dollar continue falling, rupiah unchanged

SINGAPORE (Dow Jones): The South Korean won and the New Taiwan dollar extended their falls late Monday on domestic and international pressures, while other Southeast Asian currencies staged a mixed performance.

"It's pretty much an established downtrend for the Taiwan dollar and the Korean won," said Chi Lo, a senior economist at Standard Chartered Bank in Hong Kong.

The Indonesian rupiah closed flat Monday as local companies' dollar-demand and continued worries over separatist related violence offset offshore profit-taking, traders said.

The dollar closed at 9,520 rupiah, unchanged from its closing level in Asia Friday.

Offshore dollar-selling set in since the pair were unable to break their year-high of Rp 9,580 last week.

But traders said dollar demand is still strong as corporations seek the U.S. currency to service their debt before the yearend.

Disturbances in Aceh Monday - where local separatists were marking the 24th anniversary of their unilateral declaration of independence from Indonesia - also helped keep a dollar on a bid tone.

Police tore down separatist flags Monday, while rebels from the Free Aceh Movement attacked Indonesian military outposts. Investors are concerned separatist pressure could pull Indonesia's 30 provinces apart.

Plans to decentralize power to the provinces from next year have worried many investors and the International Monetary Fund which began a one-week mission to review the country's economy Monday.

The IMF is concerned Jakarta hasn't yet drawn up strict enough guidelines to make sure the provinces don't use their new found powers to increase borrowing, adding to an already burgeoning public debt.

Foreign equity fund outflows pressured the currencies of South Korea and Taiwan, although intervention by the Taiwanese central bank earlier in the day cushioned the impact on the latter, dealers said.

The dollar was at 1,216.70 won, up from Friday's close of 1,209.50 won.

Against the New Taiwan dollar, the U.S. currency rose to a 20- month high of NT$33.071, from the previous close of NT$32.995, after the central bank withdrew its support for the local dollar late in the day, dealers said.

Against the Singapore dollar, the U.S. dollar rebounded to S$1.7525, after pulling back to as low as S$1.7475 earlier in the day. Late Friday, the U.S. dollar was at S$1.7521.

While the Singapore dollar's early rebound had prompted some dealers to say the U.S. dollar may have found a short-term top at around S$1.7600, UBS Warburg's currency strategist, Mansoor Mohi- uddin, said the Singapore dollar remains vulnerable to potential further weakness in the yen.

In the Thai currency market, the dollar edged up slightly to 43.850 baht, from 43.790 baht late Friday. The baht was largely steady earlier in the day.

The banning of same-day cash sales between onshore and offshore counterparties without any commercial purpose has made the market more cautious of shorting the baht for now, noted UBS Warburg's Mohi-uddin.

But he added that the baht's respite will likely be transient amid political uncertainties ahead of Thailand's general elections early next year.

In Manila, the dollar edged up to 49.470 pesos, from Friday's close of 49.460 pesos.