Baht Hits Recordlow, Won Rallies On Imf Deal

Most Asian currencies barring the won posted fresh losses yesterday as persistent dollar demand and dwindling trading volumes sparked fresh carnage in foreign exchange markets.

The Thai baht slumped to a record low of 49.35 against the dollar even as the South Korean won defied the trend, surging nearly 16 per cent to highs of 1,350 after the central bank decided late on Monday to scrap its trading band and allow it to float. It ended at 1,425.0 against Mondays 1,563.9 close.

Dealers said the won was benefiting from expectations of heavy dollar inflows under the IMFs nearly $60 billion bailout scheme for South Korea, which had moved players to unwind long dollar positions built during the wons near 50 per cent drop last week.

The won was also expected to face selling pressure from importers seeking dollars towards the weekend. Its improved fortunes gave the Taiwan dollar an opening boost, but it soon shed the gains in the face of strong US dollar demand from importers. The Taiwan dollar ended at T$32.820 to the US dollar, its lowest close since November 1987, against Mondays T$32.746 close. It hit a low of T$32.950.