Fed rate cut fuels Singapore dollar leads As

ASIAN CURRENCIES ROUND-UP

Asian currencies rose, with the Singapore dollar reaching the highest since 1997, on speculation a US interest-rate cut will ease investor concern over a global economic slowdown, boosting demand for riskier assets.

The Indonesian rupiah and Philippine peso climbed, along with the respective stock indexes, to the highest in about six weeks as international investors increased share purchases. The extra yield that investors demand to hold the nations' below- investment grade bonds has narrowed since the Federal Reserve cut rates by a more-than-expected half-percentage point on September 18.

'There have been money flows into Asian markets, taking advantage of rising stocks and that's good for the currencies,'' said Tetsuo Yoshikoshi, a market analyst at the treasury unit of Sumitomo Mitsui Banking Corp. in Singapore. 'This can continue for a while and we'll see more gains in the next week or two.''

The Singapore dollar rose 0.4 per cent to S$1.5031 against its US counterpart as of 4:45 p.m. local time and the rupiah gained 0.5 percent to 9,162. The peso climbed 0.5 percent to 45.335.

The Morgan Stanley Capital International Asia-Pacific Index of regional shares gained for a second day to trade at its highest since July following advances in European and U.S. stocks. The difference in yield, or spread, on JPMorgan Chase & Co.'s index of emerging-market debt over U.S. Treasuries shrank to 1.98 percentage points from 2.22 points before the Fed cut.

Global stocks were sold off over the past two months as U.S. subprime mortgage defaults spread to credit markets, prompting central banks to pump in liquidity to ease a cash shortage.

Overseas investors bought more Indonesian and Philippine shares than they sold yesterday.

The Fed's rate cut, the first in four years, was to prevent the world's biggest economy from sliding into a recession and to restore confidence in credit markets. The US is one of the biggest markets for Asian exports.

South Korea's won rose to a six-week high as Vice Finance Minister Kim Seok Dong said the reduction in borrowing costs would ease concerns in US financial markets.

``The U.S. rate cut will have a positive effect on our economy and our exports as the possibility for a soft-landing in the world economy is high,'' Kim said.

The won strengthened 0.4 percent to 923.10 per dollar, according to Seoul Money Brokerage Services. Kim said he's not ``worried'' about the level of the currency.