SINGAPORE, February 5: Asian currencies hovered in well-worn ranges on Thursday as activity dwindled to commercial flows after the previous day's sharp fall caught many interbank traders short of dollars.Dealers said the US dollar's drop to three-month lows against the yen overnight kept Asian currencies on relatively firm footing, but they showed little inclination to revisit recent highs.
"The stronger yen should enable Japanese companies that have been providing funds to Asian countries to roll over their debts," the head of regional currencies trading at a European bank in Singapore said."But the interest is more on demand and supply today. There's not much interbank activity going on because some players were hurt by yesterday's moves," he said.
The Thai baht's abrupt drop late on Wednesday from highs near 46.00 to the dollar triggered falls in other south-east Asian currencies, which had been climbing steadily this week after Bangkok scrapped a two-tier trading system and Indonesia took steps toaddress its corporate debt problems. Dealers attributed the baht's fall to a range of factors, including fears about King Bhumibol Adulyadej's health and a huge Thai corporate order for dollars to settle debt payments.
"Local Thai companies had to buy about $300 million for a loan redemption and the market was short. US funds joined in the selling when the dollar broke 49.00 and that exacerbated the baht's fall," the dealer said.The baht was back above the 50 per dollar level on Thursday as concerns about the king eased after he appeared on television on Wednesday night. But dealers said dollar demand from US and Thai names would block its rise near the 47.50 level to the dollar.The Indonesian rupiah hovered below the 9,000 per dollar level, but dealers said fears of central bank intervention would limit its falls to 10,000 for the time being.
"There is no drive to buy up the dollar because people are expecting the central bank to emerge," a US bank dealer in Jakarta said, noting that the bank hadintervened in the market for the last three days. The Malaysian ringgit was firm above 4.00 to the dollar level after recovering in overseas markets on comments by finance minister Anwar Ibrahim.Anwar said in an interview on Wednesday that an exchange rate of 3.90 ringgit per dollar was "totally unacceptable".
But dealers said dollar demand from Kuala Lumpur banks and companies near the 3.90 ringgit level was limiting the ringgit's recovery.
The Singapore dollar was firm, but its rise was also blocked by corporate demand for US dollars at 1.66/67. The Philippine peso ceded some ground to importer demand for dollars around the 40 level, while portfolio flows to the stock market fizzled out.
The Taiwan dollar gained from the yen's rise and expected foreign inflows to the stock market. Foreign funds bought a net T$3.7 billion worth of Taipei stocks on Wednesday.
The Hong Kong dollar was steady but dealers cited fears of rising interest rates amid indications players were beginning to take long-term shortpositions in the currency.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
