SINGAPORE, Jan 9: Asian currency trading was deceptively subdued today despite frenzied selling of stocks as wild rumours about central bank interventions and looming debt moratoria pared activity to a minimum.Dealers said liquidity had dwindled in Southeast Asian currencies as spreads widened because of fears that embattled Indonesia was on the verge of declaring a debt moratorium or introducing trading curbs on the rupiah. The Indonesian currency has lost nearly half its value against the u s dollar in the last six trading days. "In the rupiah, the interbank market doesn't exist anymore. Yesterday, the spread was about 100 rupiah. Today, it's 500-1,000, so it's practically impossible to trade," he said.
Rumours that US Federal Reserve had checked rates on Asian currencies overnight also kept traders on their toes, with some even citing the Fed's presence behind the rupiah's rebound of more than 30 per cent. A Fed spokesman declined comment on the rate checking rumours and most analysts were skeptical
of the US central bank intervention to shore up Asia's sagging currencies. "Nobody said they were hit in the marke here ... And if the fed did come in, it would want the world to know," said Ishak Ismail, market analyst at IDEA in Singapore.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
