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EM ASIA FX-Inflows support baht, rupiah eases on corp dlr demand
March 7, 2013 / 8:42 AM / 5 years ago

EM ASIA FX-Inflows support baht, rupiah eases on corp dlr demand

* Baht up on portfolio-linked inflows
    * Rupiah ignores c.bank decision to leave rates steady
    * Won down on importers; exporters limit falls

 (Adds text, updates prices)
    By Jongwoo Cheon
    SINGAPORE, March 7 (Reuters) - The Thai baht rose slightly
on Thursday, helped by steady inflows, while the Indonesian
rupiah shrugged off a decline in foreign exchange reserves but
eased on dollar demand from local companies.    
     The baht rose 0.1 percent to 29.73 per dollar as
of 0755 GMT on portfolio and equity-related inflows, but overall
weakness in Asian peers and profit-taking limited its upside,
traders said.
    "Investors are expecting to see a stronger baht but at the
same time they are making rounds of profit-taking," said a
Bangkok-based trader.
    But the baht's daily lows are getting stronger, indicting
that the currency will strengthen, probably to 29.50, the trader
said.
    Thursday's gain by the baht came as most emerging Asian
currencies slightly eased ahead of monetary policy meetings of
the European Central Bank and the Bank of England later in the
day.
    The ECB is expected to stand on pat, but investors are
waiting for signs of more policy stimulus.
    Still, emerging Asian currencies are seen as more sensitive
to a potential gloomy outlook for the euro zone, which will
would increase chances of more easing steps, traders and
analysts said.
    "Investors may focus more on negative economic assessments
than on rate cut expectations. So, sentiment on Asian FX may
weaken too, especially when the dollar stays firm," said Jeong
My-young, research head of Samsung Futures in Seoul.
    The greenback hovered near its highest in 6-1/2 months
against a basket of major currencies after solid job data
fuelled hopes of recovery in the U.S. labour market.
    
    RUPIAH
    The rupiah stayed at 9,690 per dollar right after Bank
Indonesia's afternoon announcement that, as expected, it was
keeping rates steady.
    In the morning, the rupiah weakened to 9,696 but some
foreign banks bought the Indonesian currency, limiting its
downside, with Jakarta shares at a record high.
    Those lenders also covered short positions, which they built
up when the rupiah was weaker than 9,700, traders added.
    The central bank left its benchmark rate at a record low
5.75 percent, despite a surge in headline inflation in February
and pressure on the rupiah from the country's trade and current
account deficits. 
    The central bank reiterated it will maintain the stability
of the rupiah in line with fundamentals.
    Foreign exchange reserves fell to $105.2 billion at
end-February from $108.8 billion a month earlier, but traders
and analysts said that showed the determination of authorities
to stabilise the rupiah.
    "What it does indicate is the fact that BI will remain
active in the market to supply dollars and support stability of
the rupiah," said Gundy Cahyadi, an economist at OCBC Bank in
Singapore.
     "But if we look in the fact that FX reserves are still
falling, it means that the bulk of the pressure still comes from
the current account side of the equation."
    
    WON
    The won slid on a broad gain in the dollar and on importers'
bids for the greenback, while exporters limited the Korean
currency's fall, traders said.
    Investors also hesitated to build up aggressive positions
before the ECB's policy meeting. 
    "Given the dollar's strength, people are inclined to sell
the won but the market forces were favourable for the won, So it
could not move much," said a South Korean bank trader in Seoul.
    
    PHILIPPINE PESO
    The Philippine peso eased on dollar demand linked to
non-deliverable forwards (NDFs) fixing, traders said.
    But the peso was locked in a tight range as investors expect
capital inflows to continue, traders said.
    "Dollar inflows are keeping dollar/peso's upside limited and
optimism on a ratings upgrade also keeps the pair heavy," said a
foreign bank trader in Manila.
    Foreign funds helped Manila stocks hit a record high, while
local bond markets enjoyed inflows on expectations of ratings
upgrade.
    In December, Standard & Poor's raised its rating outlook for
the country to positive and said it could be awarded investment
grade status for the first time if it follows through on reforms
to improve revenue and boost growth. 
    
  CURRENCIES VS U.S. DOLLAR
  Change on the day at 0755 GMT
  Currency    Latest bid   Previous day    Pct Move
  Japan yen        93.91          94.08       +0.18
  Sing dlr        1.2483         1.2486       +0.02
  Taiwan dlr      29.637         29.670       +0.11
  Korean won     1086.70        1082.60       -0.38
  Baht             29.73          29.75       +0.05
  Peso             40.74          40.69       -0.12
  Rupiah         9690.00        9685.00       -0.05
  Rupee            54.65          54.72       +0.12
  Ringgit         3.1085         3.1050       -0.11
  Yuan            6.2212         6.2181       -0.05
 
  Change so far in 2013
  Currency    Latest bid  End prev year    Pct Move
  Japan yen        93.91          86.79       -7.58
  Sing dlr        1.2483         1.2219       -2.11
  Taiwan dlr      29.637         29.136       -1.69
  Korean won     1086.70        1070.60       -1.48
  Baht             29.73          30.61       +2.96
  Peso             40.74          41.05       +0.76
  Rupiah         9690.00        9630.00       -0.62
  Rupee            54.65          54.99       +0.62
  Ringgit         3.1085         3.0580       -1.62
  Yuan            6.2212         6.2303       +0.15
 
 (Additional reporting by Yena Park in SEOUL; Editing by Richard
Borsuk)

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