20000223

Indian rupee

BOMBAY: The Indian rupee closed slightly weak on Tuesday and dealers said there was light dollar demand from importers covering their month end requirements.

"Some large corporates were there today but they were not buying aggressively ahead of the month end as there is an expectation the rupee will trend sideways," said a senior dealer at a private sector bank.

The rupee ended at 43.6125/6175 per dollar after it opened at 43.60/61.

It had closed at 43.5975/6025 on Monday.-Reuters

Indonesian rupiah

JAKARTA: Indonesia's rupiah was little changed on Tuesday, largely escaping the impact of weaker currencies elswehere in the region but with concerns about inflation keeping a lid on gains.

Dealers said trade remained thin, with investors finding fresh reasons to avoid the currency despite an easing of political tension since President Abdurrahman Wahid suspended former military chief General Wiranto from cabinet last week.

"We should have seen an improvement after the Wiranto problem was solved but there is still a lack of business, and most of the business is from corporates," said a dealer at a European bank in Jakarta.

"There are some inflation concerns, which are keeping the market in check."

The rupiah was quoted at 7,435,/7,455 to the dollar compared with The government and parliament agreed last week to raise top end electricity prices an average 29 percent effective from April, triggering worries the decision would push up inflation.

On Tuesday, Indonesia said it would also increase fuel prices and hike some taxes. Analysts said increases in the minimum wage could also be inflationary.

Inflation is expected to pick up this year, with the government's budget projecting inflation of 4.8 percent in April to end-December, and the Bappenas state economic planning agency expecting seven to nine percent.

Inflation was 2.01 percent over 1999.

"We know inflation will be going up, but there are some worries that estimates may have to be increased," the dealer said.

Bank Indonesia said 4.99 trillion rupiah in funds matured early on Tuesday. The benchmark overnight interbank rate remained largely stable, hovering at 9.375 percent for foreign banks and 9.5 percent for local banks.-Reuters

Chinese yuan

SHANGHAI: China's yuan closed unchanged against the dollar on Tuesday as the domestic currency met resistance at the 8.2770 level after rises over the past two weeks, dealers said.

China's threat to use force against Taiwan if the island indefinitely delays negotiations aimed at reuniting with the mainland had little impact on the market, they said.

The yuan ended at an intraday high of 8.2770 to one U.S. dollar, unchanged from Monday. It touched a low of 8.2777.

"The yuan seems to have lost steam after recent gains," said a dealer at a foreign bank. "The 8.2770 level proved to be strong resistance."

The yuan has risen in the last two weeks, lifted by healthy foreign trade data, dealers said.

China's exports surged 47.8 percent year-on-year to $16.8 billion in January, producing a trade surplus of $1.5 billion.

Despite recent gains, dealers said the yuan was unlikely to see further rises as it had already reached high levels.

The yuan was likely to move at the top end of a range between 8.2770 and 8.2780 in the short term, they said.

The yuan closed higher against the Japanese yen at 7.4230 to 100 yen compared with 7.5700 on Monday. It ended slightly higher against the Hong Kong dollar at 1.0633 to HK$1.0 from 1.0638.-Reuters

Taiwanese dollar

TAIPEI: The Taiwan dollar echoed a slide in local equities, losing close to nine Taiwan cents against the U.S. dollar as a political ultimatum from China prompted worried investors to reload their U.S. dollar positions.

Dealers said signs that foreign institutional investors were repatriating gains from the Taiwan stock market also ignited a wave of greenback buying.

CLOSE: T$30.791 to the U.S. dollar, slipping from Monday's close at T$30.707. On the smaller Cosmos exchange, the Taiwan unit finished at T$30.798, down from Monday's T$30.7.

TURNOVER THROUGH DEALERS: Active at US$419 million, compared with Monday's US$229 million. Cosmos turnover edged down to US$66 million from Monday's US$68 million.

"Taiwan stocks fell as low as three percent after China annouced its white paper on the Taiwan issue and did not rule out the use of force if Taiwan refused to negotiate," one foreign bank dealer said.

"This led a lot of foreign exchange dealers to worry that foreign funds would take profits and get out," he said.

Beijing released a white paper on Monday saying it would use "drastic measures, including military force" if Taiwan indefinitely delayed negotiations aimed at reuniting with the mainland.

Taiwan stocks fell hard on the news, losing 1.82 percent as investors took China's newly widened threats of an invasion as a cue to cash in on recent gains, though a firm rebound in heavyweight electronics helped avert an even lower close.

Taiwan's central bank, however, said the currency market was not affected by the China impact. It did not give a reason for the Taiwan dollar's fall.

Dealers noted outflows of foreign equity funds, though the amount was not large.

On Tuesday, foreign funds showed net selling of T$1.445 billion against net buying of T$2.125 billion on Monday.

Another foreign bank dealer said that in the absence of commerical U.S. dollar selling by exporters, the Taiwan dollar fell further after it broke through T$30.75.

Dealers expected the Taiwan dollar to trend lower on Wednesday, seeing a T$30.8-T$30.85 trading range.-Reuters

S Korean won

SEOUL: The South Korean won closed weaker against the dollar on Tuesday on steady bids by offshore players, encouraged by the greenback's gains versus the yen, dealers said.

The won closed at 1,134.0 compared with Monday's close of 1,131.5.

It opened at 1,133.0 and moved between 1,132.5 and 1,136.0.

"Speculative offshore players kept buying dollars on the back of the greenback's strength against the yen," said a dealer at a foreign bank.

Dealers estimated bids by offshore traders at about $200 million on the day, following similar dollar buying on Monday. Monetary authorities also stepped in via state-run banks, including the Korea Development Bank, to absorb more than $50 million from the currency market, dealers said.

The yen slipped against the dollar in Tokyo as pessimism mounted over Japan's ability to achieve a sustainable economic recovery.

The dollar was trading at 111.16/1.26 at 0815 GMT, down from 111.63/1.68 in early afternoon trade.

Affected by the U.S. unit's slight retreat versus the yen, market participants, including offshore players, slowed down their dollar purchases toward the end of the session, Seoul dealers said.

Some profit-taking and dollar sales by exporters were seen at around 1,135 won, they said.

"But the bullish sentiment toward the greenback is likely to go on for some time in the Seoul currency market as they expect further falls in the yen," said the foreign bank dealer. Dealers said the direction of the dollar/won on Wednesday would largely be determined by the dollar/yen movement in the New York market.

"Players keep their eyes peeled for the dollar/yen movement in overseas markets," said a local bank dealer.

The six-month non-deliverable forward (NDF) won was quoted at 1,136/37.5 at 0700 GMT versus 1,135/37 late Monday.

The one-year won remained unchanged at 1,140/42.-Reuters

Philippine peso

MANILA: The Philippine peso ended weaker on Tuesday in line with weaker regional currencies.

The renewed tension between China and Taiwan and concerns over possible U.S. rates have weighed on regional markets.

The local unit briefly stayed above the major support level of 40.75 to the dollar minutes before ending at 40.745 from the close of 40.68 on Monday.

"We just moved in line with regional currencies. The latest news is about the China-Taiwan tension which spooked the market," a dealer with a local bank said. A foreign bank dealer said: "There was a last-minute rush to buy dollars. Banks wanted to stay long while the region is still soft."

The yen was trading at 111.26/31 per dollar while the baht was at 38.23/28 per dollar in late afternoon session.

Dealers said banks saw no incentive to buy the peso because Philippine officials were bent on keeping interest rates low despite a possible uptick in U.S. interest rates.

"Peso interest rates are really low. There's no incentive to stay with pesos unless the central bank raises its interest rates," a dealer with another local bank said.

The seven-year Treasury bonds fetched a 14.25 percent coupon at Tuesday's auction, lower than the previous 14.5 percent.

At the auction on Monday, Treasury bill rates were marginally higher but the Bureau of Treasury only made a partial award.

Dealers said the substantial decline in the stock market was also forcing banks to look for yields elsewhere.

"There is no demand in stocks now. So the thinking is if you have pesos, put them in dollars instead," the local dealer said.

The 33-share main index .PSI fell 1.85 percent on Tuesday to 1,799.83 points. It had fallen 2.68 percent on Monday.

Dealers said regional currencies would continue to dictate the peso's movement on Wednesday.

"Most likely it's going to weaken again, unless some people take profits (from the dollar's gains)," the foreign dealer said.

Dealers placed the peso's next immediate trading range at 40.70 to 40.80, with 40.90 as a major support level.-Reuters