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Indian rupee

BOMBAY: The Indian rupee ended steady against the dollar on Tuesday and dealers said the market was cool to the 2000/2001 (April-March) annual budget despite some proposals to boost foreign investment flows into the country.

Finance Minister Yashwant Sinha, who presented the budget on Tuesday, hiked the investment limit for foreign institutional investors (FII) in Indian firms to 40 percent from 30 percent.

The rupee was quoted at 43.61/6125 per dollar in closing trade, little changed from opening levels and against the previous close of 43.61/615.

"So far as the foreign exchange market is concerned, it is budget-neutral. The reduction in customs duties should balance out any increase in possible inflows," the chief dealer at a European bank said.

Sinha also told parliament the country will seek a strong external sector through export growth and foreign investment.

He said local companies will get more flexibility to undertake capital account transactions. The rupee is convertible only on the current account.

The budget also proposed greater freedom for corporates to acquire foreign business in the knowledge sector and liberalised automatic route for overseas investment.

Dealers said forward dollar premiums fell after the budget announced a one percentage point cut in rates on the general provident fund scheme to 11 percent from 12, but there was paying interest at lower levels, they said.

"Now all eyes are on the Reserve Bank of India (RBI) to see when it cuts interest rates. The ball is in its court," a dealer said. The six-month premium ended at an annualised 2.81 percent against the pre-budget level of 2.92 percent and Monday's 3.0 percent. -Reuters

Indonesian rupiah

JAKARTA: Indonesia's rupiah strengthened in late trading on Tuesday on the back of a slowdown in corporate demand for the dollar and a better political situation, dealers said.

The rupiah was trading at 7,400/7,420 against the dollar compared with 7,510/7,540 when the market opened in the morning.

"I've been wondering myself why the rupiah is strengthening...but I think the main reason is because corporate demand has diminished at the end of the month," said one dealer at a local bank.

Another dealer said news the armed forces had appointed reformist Major-General Agus Wirahadikusumah to head the country's powerful army strategic reserve, Kostrad, was widely welcomed by the market.

"It's not necessarily big news for players, but still it gives a positive sentiment to the market. I suspected offshore dollar selling has given a boost to the market today," he added.

Wirahadikusumah's appointment on Monday is seen bolstering President Abdurrahman Wahid's efforts to take the military out of politics.

The first dealer said if positive sentiment stayed in the market, the rupiah could strengthen to 7,300 against the dollar this week.

"There's a possibility the range will be between 7,300-7,500 against the dollar...but I think people will be comfortable at 7,400," he added.-Reuters

Chinese yuan

SHANGHAI: China's yuan closed lower against the dollar on Tuesday as domestic banks sold the yuan for dollars due to increased foreign exchange demand from importers, dealers said.

The yuan ended at an intraday low of 8.2793 to one U.S. dollar from 8.2785 on Monday. It touched a high of 8.2785.

"We have apparent increased demand for foreign exchange from importers in the past two weeks," said a local bank dealer.

"This is an indication that China's imports are picking up after a lull during the Chinese Lunar New Year," which fell in early February this year, he said.

Dealers said despite the apparent increase in imports, there were signs that China's exports were also improving.

They said they expected China to continue to run a strong foreign trade surplus in the next few months, which would ensure a steady inflow of foreign exchange onto the market.

The yuan was likely to move between 8.2780 and 8.2800 in the near term due to a rough balance of supply and demand of foreign exchange, they said.

There was no evidence of intervention by the People's Bank of China in the tightly-controlled market although the central bank had said it planned to widen the yuan's movement range, dealers said.

An official at the bank said on Friday the government was considering widening the band but had no timetable.

The yuan closed higher against the Japanese yen at 7.4953 to 100 yen compared with 7.5454 on Monday.

It ended up against the Hong Kong dollar at 1.0632 to HK$1.0 from 1.0640.-Reuters

S Korean won

SEOUL: The South Korean won closed stronger against the dollar on Tuesday on dollar inflows from foreign buying of local stocks, though light intervention by monetary authorities limited the won's gains, dealers said.

The won closed at 1,131.0 compared with Monday's close of 1,134.3.

It opened at an intraday low of 1,135.1 and touched a high of 1,130.7.

"Players have found no particular reason to maintain their long dollar positions amid a stream of dollar supplies from foreign stock buying," said a dealer at a foreign bank. Dealers said the currency market saw an inflow of more than $200 million in such funds on Tuesday.

Foreign investors bought a net 250.6 billion won worth of shares on the Korea Stock Exchange on the day following net purchases of some 148.3 billion won in the past two sessions.

The Korean unit got off to a weak start as the yen gave up some of its gains against the greenback, but reversed course with dollar sales by offshore players.

"The dollar's gains against the yen were not strong enough to spur players in the Seoul currency market to keep their long dollar positions," said a local bank dealer.

The dollar was trading at 110.16/0.18, up from a New York close of 109.48 on Monday. Dealers said players also appeared inclined to square their positions ahead of a holiday on March 1, Independence Day.

Trading will resume on Thursday.

Dealers said they expect to see dollar buying interest by importers, including oil refiners, on Thursday.

But the dollar's upside is expected to be limited by steady stock purchases by foreign equity investors, they said.

The six-month non-deliverable forward (NDF) won was quoted at 1,131.5/33.0 versus 1,132/34 late on Monday.

The one-year won stood at 1,134.5/36.0 against 1,135/37.

The market remained largely unaffected by news that South Korea's consumer price index (CPI) rose 1.4 percent year on year in February, slower than the month before and within a range targeted by Seoul's economic planners.

The producer price index (PPI) for February rose 2.1 percent year on year, against a 4.3 percent fall a year earlier, the Finance Ministry said.-Reuters