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Indian rupee

BOMBAY: The Indian rupee ended steady on Thursday amid light dollar purchases by the State Bank of India (SBI) and another large public sector bank, dealers said.

The rupee ended at 43.5750/43.5850 after opening at 43.5725/5825 against the dollar.

On Wednesday the rupee had closed at 43.57/575.

"There were light dollar inflows during the day. But the SBI purchases have capped the rupee from rising," a dealer at a large foreign bank said.-Reuters

Indonesian rupiah

JAKARTA: Indonesia's rupiah inched higher on Thursday, boosted mainly by firmer regional currencies led by the Japanese yen.

Dealers dismissed late afternoon remarks by the country's economic chief that a fixed exchange rate was an option once the IMF programme was over.

The rupiah was trading at 7,375/7,395 to the dollar compared with 7,432/7,442 in early trade.

"Besides stronger regional currencies, there are also some good news today to boost sentiment in the market," said a foreign bank dealer.

There was some support from news that several memorandums of understanding were signed on Thursday between Malaysian and Indonesian firms during a visit by Malaysia's Prime Minister Mahathir Mohamad and a trade delegation.

Traders said overseas players were seen unloading their long dollar positions but the rupiah's movement is likely to be limited in the near-term.

"Corporate demands for dollars are always there because besides the need to repay debts, they also need them for imports," said another foreign bank dealer, adding that he saw a strong support for the rupiah at 7,200.

He saw the rupiah move between 7,300 and 7,450 on Friday.

Bank Indonesia governor Syahril Sabirin said he expected the rupiah to stay in its current range for the next one to two weeks, but added it should eventually strengthen to above 7,000.

Traders said comments by top economics minister Kwik Kian Gie about a possibility of implementing a fixed exchange rate system after the International Monetary Fund's bail-out ends had little impact.

"Everyone knows the IMF is going to be here for a long time," the dealer said.

The IMF is leading a more than $40 billion bail-out package for the crisis-wrecked country. Earlier this year it announced a new three-year loan package.

Bank Indonesia said on Wednesday it saw no need to increase domestic interest rates despite the global trend of rising interest rates due to further possible US interest rates hikes.

The US Federal Reserve's rate-setting committee next meets on March 21 to decide whether to raise borrowing costs.

Bank Indonesia said around 27 trillion rupiah in funds matured early on Thursday. Overnight rates hovered at 9.25 percent for foreign banks and 9.5 percent for local banks.-Reuters

Chinese yuan

SHANGHAI: China's yuan closed unchanged against the dollar in thin trade on Thursday as a lack of fresh market-moving factors kept most bank traders on the sidelines.

The yuan ended at 8.2787 to one US dollar, unchanged from Wednesday after moving in a narrow range of 8.2785 and 8.2789.

"Trading was extremely dull as there was no fresh market-moving factors in sight," a local bank dealer said.

Dealers said the yuan was under pressure from recent increased dollar demand as China's imports picked up after a lull during the Lunar New Year holiday in early February.

But it was supported by China's healthy foreign trade surplus in the past few months, which had ensured a steady flow of foreign exchange onto the market.

The yuan was likely to move narrowly between 8.2780 and 8.2800 in the near term, they said.

The yuan closed higher against the Japanese yen at 7.7488 to 100 yen from 7.8244 on Wednesday. It ended slightly lower against the Hong Kong dollar at 1.0636 to HK$1.0 from 1.0632.-Reuters

S.Korean won

SEOUL: The South Korean won closed weaker against the dollar on Thursday as foreign investors turned net sellers of local stocks after nine consecutive trading days of net buying, dealers said.

Net equity sales by foreign investors totalled 299.7 billion won on Thursday, against a 141.3 billion won net buying on Wednesday, the Korea Stock Exchange said.

The won closed at 1,122.4 per dollar, compared to on Wednesday's close of 1,119.0. It opened at 1,120.0 and ranged between 1,118.0 and 1,123.5. "The market veered into the long-dollar bias as foreign investors turned net sellers of stocks," said a foreign bank dealer. "The government's continued intervention also helped fan dollar build-ups."

Brokers said foreign investors unloaded shares as March futures and options contracts expired.

The government's stern action to curb the won's rise gave some pause to foreign stock investors, who have been attracted to the Korean market by the potential for currency gains.

Minister Lee Hun-jai said on Thursday the government's purchase of troubled Daewoo Group foreign debt and the purchase of foreign debt held by the overseas branches of domestic banks would help stabilise the currency market.

"Some three to four billion dollars will be needed for the government to buy Daewoo's foreign debt and to clean out the debt of domestic banks' overseas branches," Minister Lee told the Korea Chamber of Commerce.

In January leading foreign creditors of Daewoo Group agreed to sell their unsecured loans amounting to $4.84 billion to South Korea's nationalised banks at 39 to 40 percent of face value. Dealers forecast the dollar/won rate would range from 1,120 to 1,125 on Friday.

"The won's steep fall from today's foreign stock sales is unlikely because there has been some two trillion won worth of foreign stock buying since last week," said a local bank dealer.

The government is trying to put the brakes on the won's steep appreciation in an effort to help local exporters maintain price competitiveness in overseas markets.

It is also concerned that Korean companies lack hedging tools and knowledge to help them manage currency risks.

The won is not an internationally convertible currency.

The government's announcement on Thursday that it would not issue one trillion won in foreign exchange stabilisation bonds after all helped drag down the dollar/won rate slightly during the morning trade.

But dealers said rumours had already begun to circulate on Wednesday that the Ministry of Finance and Economy would withdraw the bond issue plan, which had an impact on the market that day.

A finance ministry official had said on Tuesday the government was considering a new bond issue totalling one trillion won.

But just after the market opened on Thursday, the ministry said it had decided not to go forward with the plan this month. Analysts said the reversal of the bond issue plan was prompted by signs interest rates were rising. Analysts also said given the steady dollar inflows from foreign buying of local stocks, the won was eventually expected to appreciate further.

"The government seems to be overly intervening in the currency market at the expense of price and interest rates," said Lee Soo-hee, economist at the Korea Economic Research Institute.

"The government's heavy buying of dollars through, for example, the issue of forex bonds, has already been putting upward pressure on interest rates," said a currency dealer at Citibank.

In the non-deliverable forward market, the six-month won was quoted at 1,124.0/1,125.0 against 1,120.5/22.0 late on Wednesday, while the one-year won was at 1,127.5/29.0 against 1,124.0/26.0.-Reuters

Taiwanese dollar

TAIPEI: The Taiwan dollar closed with modest gains against the US dollar on Thursday, supported by a continued tide of foreign fund inflows and a stock market rally.

But dealers said trade was thin and relatively rangebound, indicating most interbank operators had moved to the sidelines in the run-up to the presidential election on March 18.

CLOSE: T$30.758 to the US dollar, firming from T$30.766 on Wednesday. On the smaller Cosmos exchange, the Taiwan dollar ended at T$30.761 against its close of T$30.769 on Wednesday.

TURNOVER THROUGH DEALERS: slow at US$284.5 million compared to US$365 million on Wednesday. Cosmos turnover was at US$105.5 million against US$110 million on Wednesday.

The Taiwan dollar opened higher at T$30.758 to the US dollar and stayed in a tight band as interbank traders took a wait-and-see attitude ahead of the elections. Dealers said the Taiwan dollar gained upward momentum from gains in local equities, which reclaimed a government-targetted support level at 9,400 points.

On Thursday, Taiwan's benchmark TAIEX closed up 197.78 points or 2.11 percent at 9,587.27, inspired by Wall Street's rebound overnight and heavy buying by state-backed funds.

Dealers at foreign trustee banks said overseas funds continued to pour into the island's stocks, but they noted some US dollar buying as well.

They noted earlier-than-expected greenback demand from importers, and US dollar buying due to election worries kept a lid on the local unit's uptrend.

Foreign funds were net buyers of T$1.413 billion in local equities on Thursday, and have accumulated T$22.098 billion over 12 straight sessions of net buying.

A statement released by the finance ministry said foreign funds had bought a net T$117.808 billion as of Wednesday since markets reopened on January 4 after New Year's holiday.

For Friday, dealers expected a trading range of T$30.73-T$30.78 for the Taiwan currency.-Reuters

Philippine peso

MANILA: The Philippine peso closed firmer on Thursday with banks cutting long dollar positions on the back of stable regional currencies and as concerns over a stock market row eased.

Dealers said corporate demand for dollars was also weak at current levels.

The local unit ended at 40.975 to the dollar from the close of 40.985 on Wednesday. It ranged from 40.935 to 40.985. Volume thinned to $181 million from $223.9 million.

"There was some follow-through selling (of dollars). At the same time, there was no dollar demand. I think the corporates are waiting at 40.80/40.85," a dealer with a local bank said.One dealer said the selling was also prompted by market talk of dollar inflows for an investment in a listed Philippine firm.

Another said the central bank may have intervened on Thursday to ensure the peso's recovery from a stock market row before the pricing on Friday of a $1-$1.2 billion sovereign bond issue.

"It's one way to show, to assure investors that what happened was a minor thing," the dealer said.

Central bank governor Rafael Buenaventura could not be reached for comment. He has said that the bank did not intervene on Wednesday even when the peso was punished at the height of the stock market row.

Local stock market trading was almost suspended on Wednesday after the mass resignation of the stock exchange's surveillance group, who claimed there was a cover-up of brokers implicated in their investigation into the alleged price manipulation in gaming firm BW Resource Corp.

The resignation prompted the chairman of the Securities and Exchange Commission to issue an order suspending stock market trades indefinitely but his order was eventually revoked by four other commissioners.

The fiasco led the Philippine stock index to become the worst performing in Asia so far this year.

Dealers said banks were still keen on keeping long dollar positions because of the negative sentiment arising from the stock market row.

"The sentiment is still not that good, in fact it's worse," a dealer with a local bank said.

The peso, however, may be lifted when the government successfully sells its sovereign bond issue later this week.

The peso was seen to range from 40.90 to 41.05 on Friday.-Reuters