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Indian rupee

BOMBAY: The Indian rupee ended slightly weaker on Tuesday despite dollar sales by state-run banks in afternoon trade, dealers said.

Commercial demand for dollars had weakened the rupee to around 43.635 in the morning before the selling started, they said.

The rupee ended at 43.62/625 per dollar on Tuesday compared with its previous close of 43.615/62.

"Many of the banks which had built up longs (dollars) started selling later in the day. Probably the central bank does not want to see the rupee weaken past 43.635, but eventually it has to move into a weaker range around 43.65," the chief dealer of a foreign bank said. Dealers said low call rates and easier premia also made it worthwhile to keep long dollar positions.

"The weekend carry premia is almost nil, so it does not make sense to go short dollars," a dealer with a private bank said.

Dealers said a multinational conglomerate and a state-run firm had bought dollars earlier in the day.

Forward premia ended little changed after trading in a range.

The six-month forward premium ended at an annualised 2.79 percent against 2.78 percent on Monday.-Reuters

Chinese yuan

SHANGHAI: China's yuan ended higher against the US dollar on Tuesday as the number of exporters seeking to settle trade deals climbed, dealers said.

The yuan ended at 8.2790 to one US dollar against 8.2798 on Monday with the daily fluctuation narrowing to a range of 8.2787 to 8.2795, compared with the 8.2780 to 8.2800 band in the previous session.

"Some banks are selling more dollars for their corporate clients for trade settlement," said a dealer at a local bank.

On Monday, the yuan was pushed down in the last few minutes by some late dollar bids, which offered more favourable prices.

But dealers said the average dollar demand still remained at its usual level in the past two trading sessions.

The near term yuan trend could be affected by foreign trade statistics for the first quarter of this year, which are due to be released in early April, they said.

China reported a trade surplus of $2.89 billion in the first two months of this year, down from $3.77 billion in the same period of last year.

There was no sign of central bank intervention on Tuesday, dealers said.

The yuan weakened against the Japanese yen to 7.8770 to 100 yen from 7.8521 on Monday. It also ended lower against the Hong Kong dollar at 1.0639 from 1.0635.-Reuters

Philippine peso

MANILA: The Philippine peso ended weaker against the dollar on Tuesday and dealers said central bank intervention prevented it from closing lower.

The peso ended at 41.15 to the dollar from the close of 41.135 on Monday. It ranged from 41.13 to 41.20, a level at which dealers said the central bank was strongly selling dollars. Governor Rafael Buenaventura told reporters around midday that the bank did not intervene to support the peso, but traders estimated that the central bank sold $50-$60 million in late trade.

"There was no intervention. We did not intervene. The peso has only changed two percent since December and it's still within the band of other countries," Buenaventura said.

But a dealer at a local bank said: "The central bank did not just cap the peso at 40.20, they hit bids left and right that's why the peso ended at 40.15."

Another trader said: "We're looking at the same political concerns...that's why the dollar is being bought up, but the central bank was aggressively selling dollars." Buenaventura said that the central bank was watching the inflation rate for the month of March, to be released on Wednesday, before any action on its overnight borrowing rate, which it could use to mop up liquidity.

A Reuters poll of 10 economists showed Philippine inflation in the year to March would rise to 3.875 percent from 3.0 percent in February.

"There is still liquidity in the market and if any, there would be (only) a minimal increase in overnight rates...What's important is inflation will come out tomorrow and we will act accordingly on Friday," he said.

The central bank's policy-setting Monetary Board meets every Fridays.

"We should look at the regional developments also. (The peso fall) is not as dramatic compared to the others and actually only the Korean won and the Taiwan dollar have appreciated," Buenaventura added.

Volume fell to $158.6 million from $197.5 million on Monday.

A dealer at a large local bank said dollar demand was coming from offshore players and multinational companies.

"There's no good news in the market to sell the dollar. We're seeing some corporates accepting these levels already, and they're not just middle market corporates, there are some multinationals too," he said.

Another said that investors were wary that the Philippines might not be able to pass the power sector reform bill by end-June, and thus miss out the balance of its loan programme with the International Monetary Fund.

"If the government doesn't sell the National Power Corp by June, the IMF might stop the next loan for the Philippines, which they did to Indonesia last week," the dealer said.

Dealers placed on Wednesday's trading level at 41.15 to 41.25.-Reuters

S.Korean won

SEOUL: The South Korean won was weaker against the dollar by midday on Tuesday as only modest intervention by state-run banks was needed to cap the won in thin activity a day after authorities took strong action to rein in the currency, dealers said.

The won closed the morning session at 1,113.4 compared with Monday's close of 1,112.3.

It opened at 1,113.0 and moved in a tight range of 1,112.4 to 1,113.8.

"Players wanted to take a break from the volatility in the wake of strong intervention on Monday," said a dealer at a city bank. Dealers said the market was quiet throughout the morning as players were unwilling to either sell or buy dollars at 1,113 won level, which was being supported by authorities.

A Finance Ministry official said in mid-morning that a rapid rise in the won was not desirable given the dwindling trade surplus, which added to the won's recovery, analysts said.

"The government wanted to keep the won on a comfortably weak bias," said a foreign bank dealer.

Dollar sale offers from Korean exporters have declined sharply with the start of the new month and corporate dollar demand for import settlements have yet to appear, dealers said.

They expected the won to remain rangebound at 1,111 to 1,114 in afternoon trade.

Some traders said the market might see some dollar inflows from foreign investors buying local stocks later in the day.

The six-month non-deliverable forward (NDF) won was quoted at 1,114.0/15.5 versus 1,113.0/14.5 late on Monday.

The one-year won stood at 1,116.5/18.0 against 1,115.5/17.0.-Reuters