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Indian rupee

BOMBAY: The Indian rupee ended weaker on Wednesday after heavy dollar purchases for imports and foreign fund outflows, dealers said.

Dealers said a European bank was buying cash dollars on behalf of foreign funds while state-run banks including the State Bank of India (SBI) also bid, suspected to be for diamond and other imports by state-owned firms.

The rupee ended at 43.59/595 per dollar, after being dealt at a high of 43.5925, and compared with a steady open at 43.565/57.

Dealers said an American bank sold dollars at higher levels in closing deals.

Unlike on Tuesday when huge dollar supplies from the long weekend were absorbed by state-run banks, trade was mostly led by imports, dealers said.

There was absolutely no impact on rates of either the slight easing of US economic sanctions or the rise in US interest rates, dealers said.

US President Bill Clinton, currently visiting India, on Tuesday announced easing of sanctions to allow a $25 million programme for Indian financial markets. The US also expanded market access on more than $40 million of agricultural exports to India.

The Federal Open Market Committee raised the fed funds rate on overnight loans between banks by 25 basis points to 6.0 percent. The Fed also raised the discount rate on loans to banks by 25 basis points to 5.5 percent.

"Despite the arbitrage benefit, premium went up," a dealer with a private bank said.

Forward premia edged up in the near maturities particularly after call rates closed higher at near 10 percent, dealers said.

There was slight receiving by state-run banks, they said.

The six-month dollar premium ended up at an annualised 3.56 percent compared with Tuesday's 3.49.-Reuters

Chinese yuan

SHANGHAI: China's yuan closed higher against the dollar on Wednesday despite the US Federal Reserve's overnight hike in interest rates.

The yuan ended at 8.2775 to one US dollar against 8.2781 on Tuesday after moving in a range of 8.2773 to 8.2786, broader than the 8.2780 to 8.2787 trading range on Monday.

"The interest rate rise did not affect the tightly controlled market here," said a dealer at a foreign bank. "On the contrary, dollar selling increased slightly as some banks needed to settle for their clients."

The US Federal Reserve raised its key funds rate by 25 basis points to six percent.

But dealers said the rate hike could set the stage for a rise in interest rates for US dollar deposits in China.

There was no signs of intervention by the People's Bank of China on Wednesday, but dealers said the central bank could move if the yuan eased to test 8.2800, dealers said.

The yuan closed up against the Japanese yen at 7.7522 to 100 yen from 7.7604 on Tuesday. It ended higher at 1.0627 against the Hong Kong dollar compared with 1.0637.-Reuters

S.Korean won

SEOUL: The South Korean won surged to its highest close of the year on Wednesday as government intervention was overwhelmed by strong foreign buying of local stocks, dealers said.

The won closed at 1,112.9, compared with Tuesday's close of 1,116.4.

It opened at 1,117.5 and rose as high as 1,112.7 on the day. "Continued foreign buying of local stocks, coupled with exporter dollar sales, put pressure on the dollar, sending it to a year low," said a foreign bank dealer.

Foreign investors bought a net 252.88 billion won worth of local shares on Wednesday.

Foreigners have been net buyers on the Korea Stock Exchange for seven consecutive sessions.

Dealers said monetary authorities appeared to have lowered their dollar support level slightly in the face of foreign investors' aggressive stock purchases.

"Despite their repeated verbal warnings, monetary authorities seem to be allowing the won to appreciate gradually," said another foreign bank dealer.

He said the government's next support level would stand at 1,110 won. -Reuters

Philippine peso

MANILA: The Philippine peso finished firmer against the dollar on Wednesday as banks unwound long dollar positions after the expected 25-basis-point hike in US interest rates overnight.

Some inflows from offshore players also helped lift the peso late in the session, traders said.

"It could be hot money again. There's relief after the Fed meeting, and that could bring some positive sentiment back into the local market," said a trader from a local bank.

The local unit closed at 40.895 to the dollar against its on Tuesday close of 40.963. The peso traded within a range of 40.94 to 40.885 to the dollar during the session. The US Federal Reserve pushed up its key short-term interest rates by 25 basis points, a level widely expected by the market, to keep the US economy's expansion on track.

However, there were some banks which maintained a cautious stance, buying back dollars as the peso was strengthening.

"The Fed hike was already known by the market, so the mood of banks was more relaxed. But they are not too keen to short the dollar aggressively because the peso has reversed at the 40.85 to 40.90 level in recent sessions," one trader said.

Traders said some corporate demand also came in at the 40.90 level but the dollar supply was higher than the demand, allowing the peso to end firmer.

The peso also took its cue from stronger regional currencies, particularly the baht and the Singapore dollar.

"The region is trading on a positive note too," said a trader from a foreign bank.

Traders said the peso could test the 40.85 to the dollar level on Thursday, with the major resistance pegged around the 40.75 mark.-Reuters

Indonesian rupiah

JAKARTA: The Indonesian rupiah edged higher as the market shrugged off a further fall in the benchmark Bank Indonesia certificates (SBI) rate on Wednesday and the US Federal Reserve's quarter point rate hike.

The local unit was quoted at 7,435/7,455 to the dollar compared with 7,460/7,480 at Tuesday's close.

Dealers said upbeat comments on the domestic economy and firmer regional currencies helped boosted sentiment in the rupiah, but overall sentiment remained cautious.

"Some good news on the economy, stronger regionals and talks that Astra bidders were placing dollar selling orders helped strengthen the rupiah," one European bank dealer said.

The dealer said Astra bidders were likely to prefer making the payment in the local unit for the simple reason that the shares are priced in rupiah.

The Indonesian Bank Restructuring Agency (IBRA) announces at the weekend the winning bidder for a stake of around 40 percent in auto conglomerate Astra International, expected to fetch around $500 million.

Foreign exchange markets had been braced for the impact of a sudden conversion from the proceeds. The money is to be used to help bridge the budget deficit for the fiscal year that ends on March 31.

Bank Indonesia said 5.7 trillion rupiah in funds matured early on Wednesday. Overnight rates still hovered at 9.25 percent for foreign banks and 9.5 percent for local banks.

The benchmark one-month SBI rate fell to 10.91 percent on Wednesday from 10.95 percent last week.

Indonesia said on Wednesday GDP growth in the year to end-March could be above two percent, and suggested it could rise to above the forecast 3.8 percent in the April to December 2000 period. -Reuters