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Indian rupee

BOMBAY: The Indian rupee ended steady on Friday after trading in a tight range, dealers said.

"Activity has been quite subdued today in the spot market but forwards were quite active," a dealer at a state-run bank said.

Dealers said the tight conditions in the money market stopped banks from taking long dollar positions, whereas state-run banks were preventing any strengthening of the rupee.

The rupee ended at 43.575/58 per dollar. It had opened at 43.57/58 compared with on Thursday's close of 43.57/575.

The six-month premium ended at an annualised 3.28 percent, off the day's high of 3.51 percent and compared with Thursday's close of 3.35 percent.-Reuters

Chinese yuan

SHANGHAI: China's yuan closed up slightly against the dollar in thin trade on Friday as a lack of fresh incentives kept banks on the sidelines, dealers said. The yuan ended at an intraday high of 8.2786 to one US dollar from 8.2790 on Thursday. It touched a low of 8.2791. "The yuan moved narrowly while a lack of fresh market-moving factors caused trade to thin," a local bank dealer said. The yuan was supported by China's healthy foreign trade surplus in the past few months, which has ensured a steady flow of foreign exchange onto the market, dealers said. But there was some downward pressure from increased dollar demand as China's imports picked up after of the Chinese Lunar New Year holiday in early February, they said. The yuan was likely to move narrowly around the 8.2790 level in the near term, dealers said. The yuan closed higher against the Japanese yen at 7.7093 to 100 yen from 7.7137 on Thursday. It ended marginally higher against the Hong Kong dollar at 1.0631 to HK$1.0 from 1.0633.-Reuters

S.Korean won

SEOUL: The South Korean won closed unchanged against the dollar on Friday as the currency market saw smaller than expected dollar inflows despite record stock buying by foreign investors, dealers said. The won closed at 1,121.4 unchanged from on Thursday's close. It opened at 1,122.1 and moved in a tight range between 1,119.7 and 1,122.5. "Frankly speaking, we are puzzled. We can't pin down the exact reason why the market saw so small dollar inflows from foreign stock buying," said a dealer at a foreign bank.Dealers said they had expected the Korean unit to break above the 1,110 won level to test a year high given the amount of net foreign stock purchases. Foreign investors bought a net 855.9 billion won worth of shares on the Korea Stock Exchange on Friday, setting a new record for the year following 626.0 billion won in net buying on Thursday. Dealers said the foreign exchange authorities were in the market to absorb dollar inflows from exporters and conversion demand from foreign equity investors. "But that does not explain it all. Actually, dollar buying intervention by the authorities was weaker today than before," said the foreign bank dealer. Conscious of foreign investors' strong appetite for Korean electronics and telecom shares, the Finance Ministry issued a verbal warning minutes after the opening, with a vow to take stern and direct measures if necessary. A dealer at a local bank said foreign investors might have maintained their won holdings from earlier stock sales only to reinvest in the local stock market again. As the dollar was seen strongly supported above 1,120 won, interbank operators began to cover their dollar shorts while some other players squared their positions ahead of the weekend, dealers said. Forecasts for the direction of the dollar/won for early next week remained mixed. Some dealers expected the dollar/won to rebound from recent slides if foreign stock buying dwindled and the government tried to take advantage of this to step up dollar-buying intervention to keep the won at a weaker bias.

But other dealers said the won could rise sharply to test a year high if dollar sales from foreign stock buying started to enter the local currency market. "The amount and timing of dollar inflows from foreign stock investment would be the key determining factor next week," said a dealer at a city bank. The six-month non-deliverable forward (NDF) won was quoted at 1,122.5/24.0 versus 1,122/23 late on Thursday. The one-year won stood at 1,125.5/27 against 1,125/27.-Reuters

Philippine peso

MANILA: The Philippine peso settled higher against the dollar on Friday after the central bank effectively raised its overnight borrowing rate, dealers said. They said the local currency also drew its strength from generally stable regional currencies and scant dollar demand from companies in the local market.

The peso closed at 40.88 to the dollar from the previous 40.92. Turnover was slightly lower at $174.20 million from the previous $183.8 million.

Traders said some banks and exporters converted their dollars into peso after the central bank announced earlier on Friday it would maintain its overnight borrowing rate at 8.75 percent next week but that it had scrapped a scheme of lower rates for higher sums of money deposited with it.The central bank had previously set an interest rate of 8.75 percent for the first 500 million pesos that it borrowed and a rate of eight percent for further amounts.

Central bank governor Rafael Buenaventura said the bank will now adopt a flat borrowing rate of 8.75 percent. "There was a little reaction (to the central bank move). That and the stable regional currencies gave the peso breathing space," a trader said. Early this week, the peso fell below its major support of 41 to the dollar as foreign funds exited from the local equities market due to the expected increase in US rates this month and worries that the Philippines may not be able to maintain its growth momentum.

The price manipulation scandal in shares of Philippine gaming firm BW Resource Corp also spooked confidence in the local market. Traders said they expected the peso to be firm next week. A second trader said he expected the peso to hit a high of 40.75 next week. "We might see continued appreciation of the peso because of slow (dollar) demand," a third trader said.-Reuters

Indonesia rupiah

JAKARTA: Indonesia's rupiah edged down on Friday as local corporate dollar buying emerged after the local unit was unable to continue Thursday's rise.

The rupiah was quoted at 7,445/7,455 against the dollar compared with 7,415/7,435 in late local trade on Thursday. Dealers said trading was very thin, with only a few deals done. "Stronger dollar buying emerged after the rupiah failed to sustain its strong gains early yesterday, but overall trading volume remains very small," one European bank dealer said. Dealers said the rupiah's retreat was due to worries over new central bank regulations on foreign exchange transactions, President Abdurrahman Wahid's recent move to reshuffle the powerful military and that foreign fund managers are trying to push prices down.

They said the foreign fund managers' moves were due to expectations that the government may have to conduct a fire sale of its assets after it came under pressure from parliament to raise asset sale and privatisation targets for the new budget from April 1. Dealers also said the rupiah had been under strong pressure recently due in part to concern over a new regulation on foreign exchange transactions in which banks must report their foreign exchange deals starting from March.

They said there were rumours that third party funds denominated in foreign currencies had dropped sharply, between 30 to 50 percent in some big banks, recently because wealthy Indonesians were worried that their identity may be disclosed due to the new foreign exchange rule. Bank Indonesia said 5.17 trillion rupiah funds were matured early on Friday.

The benchmark interbank overnight rate was quoted mostly at 9.375 percent for foreign banks and 9.5 percent for local banks. Dealers said an association of Indonesian foreign exchange dealers was due to hold a meeting late on Friday to elect new management.-Reuters