Rupiah drops while peso reverses decline

ASIAN CURRENCIES ROUND-UP

Indonesia's rupiah fell the most in three weeks on concerns that record high oil prices will slow growth and fan inflation, thereby reducing the appeal of the nation's assets.

The rupiah was among nine of the 10 most traded currencies in the Asia-Pacific region to decline this week on speculation that a US housing market slump will slow global growth and corporate earnings. The US is one of Asia's biggest export markets.

"The main concern is oil prices for high-yield currencies such as the rupiah,'' said Branko Windoe, head of the treasury in Jakarta at PT Bank Central Asia, Indonesia's second-largest lender. "There is a reversal of risk appetite. We are seeing a sell-off in stocks.''

The currency dropped as much as 1.1 per cent before trading at 9,093 a dollar as of 4:30 pm in Jakarta from 9,060 yesterday, according to data compiled by Bloomberg. The rupiah may fall to 9,200 this week, Windoe said. It has declined 1.1 per cent this year and is the second worst performer among the Asian currencies.

The Philippine peso rose, snapping two days of losses, after the government reported a smaller-than-expected budget deficit in September, boosting investor confidence in the nation. The peso was the best performer among the 10 most actively traded Asian currencies outside Japan. It reversed earlier losses after the government said that it had a shortfall of 14.5 billion pesos ($327 million) last month, lower than its estimated deficit of 17.1 billion peso.

"The deficit numbers help increase investor interest in the Philippines, which reflect positively on the peso,'' said Catherine Tan, head of regional foreign exchange at Thomson Financial in Singapore.

The local currency added 0.4 per cent to 44.165 a dollar in Manila after falling as low as 44.52, according to Tullett Prebon, the world's second-largest inter-dealer broker.

The Vietnamese dong was little changed near the low in three weeks on speculation the central bank was buying dollars.

The dong declined as much as 0.1 per cent before trading little changed at 16,082.5 in Hanoi, according to data compiled by Bloomberg. The currency hasn't closed weaker than 16,098.50 since September 25, when it reached 16,113.

The government has requested the State Bank of Vietnam to continue its purchases of foreign currencies to keep the exchange rate of the dong against the dollar stable, Tuoi Tre newspaper reported yesterday, citing a directive from Deputy Prime Minister Nguyen Sinh Hung.

Elsewhere, the South Korean won declined 0.1 per cent to 918.40 and the Taiwanese dollar held at NT$32.605. The Singapore dollar rose 0.1 per cent to S$1.4659. The Thai baht fell 0.1 per cent in offshore trading to 31.44 and was little changed onshore at 34.17.