20000303

Indian rupee

BOMBAY: The Indian rupee ended steady on Thursday amid heavy dollar supplies, most of which were absorbed by state-run banks, dealers said.

Large foreign banks were selling what the market said were probably foreign fund inflows, they said.

The rupee ended at 43.57/575 per dollar compared with the previous close of 43.575/58.

Dealers said the forward market was also very volatile.

There was heavy paying across maturities by corporates and banks sparked by tight money market conditions and disappointment the central bank had not announced an interest rate cut, they said.-"The spot market had only supplies (of dollars) today while the forward market had absolutely none," a dealer with a foreign bank said.

Markets have been expecting the Reserve Bank of India (RBI) to cut rates after the annual budget like it did last year.

Finance Minister Yashwant Sinha presented his budget for 2000/2001 (April-March) to parliament on Tuesday.

He announced a reduction in rates on the general provident fund, but the has so far not indicated any change in rates.

The six-month premium ended at an annualised 3.35 percent on Thursday compared with the previous 3.14.

There was however slight receiving seen in premiums in late trade on hopes the will infuse liquidity through open market bond purchases, dealers said.-Reuters

Chinese yuan

SHANGHAI: China's yuan closed slightly lower against the dollar on Thursday as domestic banks bought dollars due to increased foreign exchange demand from importers.

The yuan ended at 8.2790 to one US dollar from 8.2786 on Wednesday after moving in a range of 8.2775 and 8.2791.

"We have seen increased dollar demand from domestic importers recently and we needed to buy dollars on the foreign exchange market," said a local bank dealer.

Dealers said China's imports were picking up after a lull in early February because of the Chinese Lunar New Year holiday.

But China's healthy foreign trade surplus in the past few months would ensure a steady inflow of foreign exchange onto the market and help the yuan to move steadily in a narrow range between 8.2780 and 8.2800 in the near term, they said.

The yuan closed lower against the Japanese yen at 7.7137 to 100 yen compared with 7.6675 on Wednesday.

It ended little changed against the Hong Kong dollar at 1.0633 to HK$1.0 from 1.0632. -Reuters

S Korean won

SEOUL: The South Korean won closed sharply higher against the dollar on Thursday as steady foreign buying of local stocks sparked dollar unwinding despite repeated intervention, dealers said.

The won closed at 1,121.4 compared with on Tuesday's close of 1,131.0.

It opened at 1,132.0 and hit a high of 1,120.9.

"Pressured by aggressive stock buying by foreign investors, market participants rushed to sell dollars despite repeated government intervention," said a local bank dealer.

He said the dollar/won rate appeared certain to break into the 1,110-1,120 won range on Friday and could test a new year low if the foreign stock buying spree continues on Friday.In the stock market, foreign investors went on a shopping spree for electronics shares buoyed by higher spot chip prices.

Foreigners bought 626 billion won worth of shares on the main board which closed up 66.28 points, its biggest point gain ever, at 894.66.

The dollar/won had also been under pressure after the yen strengthened to a five-week high of 106.55 per dollar overnight in New York.

Dealers said state banks absorbed about $500 million from the currency market, but was unable to discourage the dollar selling.

The finance ministry issued verbal warnings twice during the day, saying it was closely monitoring the foreign exchange market and would take action if the rate became volatile.

The ministry said in a statement it would be undesirable for the won to follow the dollar/yen moves because Korea's trade surplus was dwindling.

The Commerce Ministry said on Wednesday Korea posted a trade surplus of $802 million in February compared with a revised $1.7 billion surplus in the same month in 1999. The government keeps a close watch on the dollar/yen movement because Korea and Japan compete fiercely in key export items such as cars, ships and electronics goods.

Despite intervention, however, dealers said the won would appreciate in the long run largely due to robust foreign direct and equity investments.

Ten interbank dealers and economists polled by Reuters in January forecast the won would, on average, strengthen to 1,080 by the end of June and to 1,034 by the end of 2000.

The six-month non-deliverable forward won was quoted at 1,122/24 versus 1,131/33 late on Tuesday.

The one-year won stood at 1,124.5/26.5 against 1,134/36.-Reuters

Philippine peso

MANILA: The Philippine peso closed a shade firmer on Thursday following gains by most regional currencies against the dollar and a lack of dollar demand from both local and offshore players.

Anticipation of an adjustment in the central bank's overnight rates when the bank's policy making body meets on Friday also kept banks from buying dollars aggressively, traders said.

The peso finished at 40.92 to the dollar against on Wednesday's 40.985.Trading volume narrowed to $183.80 million against the previous $211.50 million.

"There is more bias for the peso to appreciate. If the central bank raises its rates, the peso should appreciate," said a trader from a local bank.

The central bank said it will consider raising its overnight borrowing rate to protect the peso from short-term attacks.

The peso broke through the key 41 to the dollar mark on Tuesday for the first time in five months on concerns over a possible increase in US interest rates and a downward spiral in the stock market early this week.

"The possibility of an increase in (domestic) rates is keeping the peso afloat," another trader from a foreign bank said.

Traders said the peso could range from 40.80 to 40.95 to the dollar on Friday assuming the central bank moves to hike its overnight rates. However, the peso could retest the 41 to the dollar level if the central bank leaves rates unchanged, they said.-Reuters

Taiwanese dollar

TAIPEI: The Taiwan dollar nudged higher to its fourth closing high against the US dollar on Thursday, reflecting the Japanese yen's strength overseas.

Dealers noted central bank aggressive intervention to blunt the local unit from appreciating above T$30.7 ignited some greenback short-covering, which slowed the unit's gains.

CLOSE: T$30.712 to the US dollar against its close of T$30.736 on Wednesday. On the smaller Cosmos exchange, the Taiwan unit ended at T$30.711, firming from Wednesday's finish at T$30.733.

TURNOVER THROUGH DEALERS: moderate at US$333.5 million, down from US$379 million on Wednesday.

The Taiwan dollar opened higher at T$30.718 to the US dollar and advanced further with boost from a bullish Japanese yen, touching as high as T$30.7.

The unit eased back in afternoon trade as some operators emerged to cover their greenback shorts under central bank moves. Cosmos turnover edged down to US$108 million from US$114 million on Wednesday.

Dealers said the Taiwan currency was gaining strong momentum from the Japanese yen, which soared to a five-week high of 106.55 overnight in New York on Wednesday.

The yen, whose movements often dictate the Taiwan dollar direction, was trading around 107.44/49 compared to its close of 107.13 in New York.

With the Taiwan currency hitting T$30.7 in early trade, dealers said the buoyant Taiwan unit triggered a huge wave of US dollar buying, which kept the local unit from rising further.

"The central bank apparently doesn't want to see the Taiwan dollar rise above T$30.7. Some market players turned to cover their US dollar shorts after learning the Taiwan dollar was unlikely to climb higher," said one dealer at a domestic bank.

Despite some greenback shortcovering, dealers said a continued tide of foreign fund inflows was offering upward momentum to the Taiwan currency.

Foreign funds bought a net T$3.856 billion in local equities on Thursday, bringing accumulated total net buying of T$10.4 billion over six consecutive sessions.

For on Friday, dealers expected the Taiwan currency to trade between T$30.68 and T$30.73.-Reuters

Indonesian rupiah

JAKARTA: Indonesia's rupiah strengthened in early trade on Thursday as off-shore players and some local state banks sold dollars, after the US currency tumbled to a five-week low against the Japanese yen overnight.

The rupiah was trading at 7,350/7,370 against dollar compared with 7,400/7,420 in late trade on Wednesday.

Dealers said the strengthening of yen helped rupiah which is expected to hit the 7,350 level later in the day. However, concern over US interest rates continued to overshadow the market. "The rupiah was already at 7,300 level at the close of New York market overnight from a 7,400 level previously so Jakarta just followed it," one dealer with a state bank said.

Dollar was higher against the yen in early morning trade on Thursday, but the dollar is still considered vulnerable after tumbling to a five-week low of 106.55 yen overnight, dealers said.

Dollar was quoted at 107.39/42 yen. Dealers said the revision of the budget for April to December 2000 which had been agreed by the parliament on Wednesday also gave a positive sentiment to rupiah.

"If rupiah fails to break 7,350 level today so the currency will go back to the 7,400 level," one dealer said.

Dealers said political issues are not the market's focus any more.

Indonesian MPs on Wednesday approved a series of optimistic revisions to the budget for April to December 2000, anticipating a smaller budget deficit and less need for foreign loans.-Reuters