Southeast Asia's leading currencies continued their slide to record lows yesterday in volatile trade as panicking corporates scrambled for US dollars and volumes stayed thin.
The Indonesian rupiah fell to within a hair's breadth of breaching the 6,000-to-the-US-dollar barrier yesterday morning in light turnover, before being nursed back to 5,400 on central bank intervention.
It then dived again to close Singapore trading at 5,600, having traded in an extraordinary 600 rupiah band.
Bank Indonesia managed to shift the market three times, intervening with just US$1 million on each occasion.
Independent Economic Analysis analyst Jacqueline Ong said: 'The market was so thin, US$1 million could be king.' Similar extreme swings were seen elsewhere in Southeast Asia, with the Singapore dollar, Thai baht, Philippine peso and Malaysian ringgit all striking new historic lows at different stages of the day, with sentiments continuing to be dragged down by the rupiah's recent dramatic fall.
Like Indonesia, the Thai and Malaysian central banks managed to reverse their currencies' falls using only token amounts.
Elsewhere in the region, the Taiwan dollar sank to NT$32.82 to the US dollar, its lowest close in 10 years, seemingly ignoring the South Korean won's rebound.
Among Southeast Asian currencies, the Philippines peso looked most vulnerable.
It was suspended three times yesterday, after breaking its volatility band, closing above the psychological 40-to-the-US-dollar barrier for the first time at 40.21.
Turnover was just US$9.5 million, compared to a normal US$170 million average.
Analysts fear the peso could sink through the 45 mark, perhaps even to 50 to the dollar.
'The peso's fall is snowballing,' Angping & Associates (Manila) analyst Warren Chua said.
The Philippine central bank is torn between lowering interest rates and devaluing its currency. 'Bangko Sentral ng Pilipinas is pressed between two walls - either a lower currency or lower interest rates,' Mr Chua said.
'At the moment, people seem to be satisfied with a lower currency if it means interest rates can come down.' The Singapore dollar broke S$1.70 to the US unit for the first time in late trade, sold down on the perception Singapore needs to further weaken its currency to remain regionally competitive.
ANZ Investment Bank treasury research head Daniel Lian said: 'There is also a perception that Singapore is linked to Indonesia, so the more Indonesia suffers, the more likely it may take in Singapore's help.' Singapore has extended US$5 billion in top-up credit to Indonesia to support its foreign reserves and back up the IMF's US$23 billion bailout.
The baht tumbled to 49.35 to the dollar, but swung back to 47.60, following central bank intervention. However, analysts still think it is heading through 50 given heavy corporate US dollar demand.
The ringgit also had a bouncy day, moving dangerously close to M$4 to the US unit before Bank Negara nursed it back to M$3.87.