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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: Rational who wrote (1101)	1/18/1998 6:53:00 PM
From: Zeev Hed	Read Replies (1) \| Respond to of 9980

Sankar, I think that you are right and that the major decline in the Rp was induced by domestic flight to the dollar (and corporate flight as well). In essence emptying the foreign reserves in government coffers. In my opinion it is very similar to the "name" fiasco that in my opinion destabilized the Korean Won. One thing, in my opinion, is clear, these currencies were ripe for destabilization since the first half of last year and these specific events were just the proverbial straw (in each case) that broke the camel back. The weakness were systematic and due to excessive borrowing (and as you stated reckless lending, but not so much by Citibank as by the Japanese ($100 billions?), the French ($55 billions?), HK ($40 billion?) and the German and British (about $70 billions combined?). I do not think that the IMF had any choice but come in a provide short term loans, demand decentralization of the economies and desertion of unrpofitable or exuberant mega projects. Zeev

To: Rational who wrote (1101)	1/19/1998 8:00:00 AM
From: tom	Read Replies (1) \| Respond to of 9980

The value of US$ in Indonesia is analagous to the price of rice in a famine. No matter what the theoretical value of Rupiah they are effectively worthless as no one wants to hold them. US$ are scarce and almost priceless. The reason that the currency is falling apart is that Indonesians don't want to hold Rupiah. Forget about the hedge funds they've got very little to do with it especially as the penalty for shorting the currency is death. Sell! (if you can find any mug to buy the Rupiah that is)