Global Stock meeting results in progress of Asian Currencies – Rupiah and Peso

Bloomberg, August 22, 2007 – The currencies that offer highest yields amongst the other currencies in Asia are the Indonesian Rupiah and Philippine Peso. These currencies rose as gains in global stocks encouraging investors to buy market resources that are rising.

The day before, the Jakarta Composite Index bought more shares than they sold after the overseas funds surged 3 percent because of this the value of Rupiah raised. The central bank will meet to decide on interest rates tomorrow, before which, the value of peso has already risen by 1 percent mostly in Asia. Comparing the costs of U.S. dollars with Philippines and Indonesia, US cost is 5.25 percent and Philippines borrowing cost is 6 percent and Indonesia’s is 8.25 percent.

An economist at forecast Singapore, Vishnu Varathan said “People are trying to go back to higher yielding currencies, but in a precise way”.

According to the information collected, Rupiah gained 0.5 percent to 9395 against the dollar at 3:44 pm in Jakarta. This currency is not a good performer this year as it lost 4.3 percent. The peso rose to 46.455 per dollar.

Marcelo Ayes, senior treasury vice president at Rizal Commercial Banking Corp. in Manila said that the peso rose on thought that the central bank is selling dollars to stop the currency from reaching the 47 level.

“The central bank is trying to smoothen the currency movement, given the recent instability in the market,” said Ayes.

When related to losses in sub prime mortgages, spread nine of ten Asia’s most trades currencies have fallen this month. South Korea’s won fell 0.1 percent to 944.10.

Instability in the market

Japan and South Korea’s finance ministers said today that financial market disorders needs to be closely watched to make sure that risks to the global economic expansion do not become too much.

According to the statement the ministers said “accepted the need for constant observing of the instability in international financial markets”.

U.S. Treasury Secretary Henry Paulson said in an interview the day before, that instability in credit markets will “take time” to fall down.

The Thai baht fell 0.2 percent onshore to 34.46. Prime Minister Surayud Chulanont said Dec. 23 is the “most appropriate” date for a general election, and that will be discussed with the Election Commission. His comments came after the majority of eligible voters approved the junta’s draft for a constitution on Aug. 19.