Bank Indonesia calls for vigilance over rupiah's falls<\/p>\n
JAKARTA (JP): The Indonesian rupiah weakened against the U.S.
\ndollar yesterday, and the monetary authorities were tightening
\nrupiah liquidity to ease speculation on the currency, dealers
\nsaid.<\/p>\n
The rupiah closed on the spot market at 2,610\/2,6120 yesterday
\nfrom the day's opening of 2,575\/2,585 and Wednesday's close of
\n2,585\/2,595 following a currency slump in the region.<\/p>\n
Jakarta stock prices also tumbled, with the composite index
\ndropping 0.9 percent yesterday to 712.04 as investors sold stock
\nacross the board on the back of a weaker rupiah, brokers said.<\/p>\n
\"The rupiah volatility did trigger selling of stocks which got
\nhigh exposure to U.S. dollar debts,\" said ANZ Panin Securities'
\nstocks analyst Tom Soulsby.<\/p>\n
Bank Indonesia (the central bank) governor J. Soedradjad
\nDjiwandono called yesterday on banking and business leaders to
\nremain vigilant to assure stability in the rupiah.<\/p>\n
He also drummed support from players in the banking and real
\nsectors to help stabilize the rupiah.<\/p>\n
\"We have to always be cautious, we have to be vigilant, we
\ncannot be careless,\" Soedradjad told journalists after the
\nopening of an Indonesian National Private Banks Association
\nmeeting.<\/p>\n
\"When the situation really calms down, and there is a new
\nequilibrium, we must make sure that the system we have already
\nbuilt will not be shaken,\" he added.<\/p>\n
Bank Indonesia has intervened by selling dollars this week to
\ncalm the markets as the rupiah sharply weakened in foreign
\nexchange trading.<\/p>\n
Soedradjad revealed that the central bank injected US$700
\nmillion into the market on Monday and Tuesday to neutralize
\nspeculative attacks on the rupiah.<\/p>\n
Dealers said the central bank pumped in another $400 million
\non Wednesday to defend the rupiah.<\/p>\n
Yesterday, however, the central bank was not seen intervening.
\nBut it was draining the rupiah from the market by increasing the
\novernight rate for short-term Bank Indonesia Certificates (SBI)
\nto 14 percent from 13 percent on the previous day.<\/p>\n
\"We expect the central bank to again raise overnight rates for
\nSBI to 15 percent or 16 percent tomorrow to discourage
\nspeculation on dollar using short-term rupiah,\" a dealer with a
\nlocal foreign exchange bank said.<\/p>\n
A dealer with a state bank said the central bank asked
\nyesterday for state banks to purchase a certain amount of SBI.<\/p>\n
\"I heard that tomorrow, the central bank would ask certain
\nprivate banks to absorb new SBIs,\" she said.<\/p>\n
Dealers said that the central bank did not purchase any short-
\nterm money market securities (SPBU) yesterday, which made a
\nnumber of local banks face liquidity problem.<\/p>\n
\"It seems to me that the central bank is going all out to
\ndrain short-term rupiah from the market. It's a good move to
\nprevent dollar buying with cheap rupiah, but it burdens a number
\nof local private banks with low liquidity,\" a dealer said.<\/p>\n
The central bank kept its intervention band at 2,378\/2,682 but
\nraised the conversion band to 2,566\/2,614 yesterday from
\n2,549\/2,597 on Wednesday.<\/p>\n
Stockbrokers said the weakening rupiah was the main reason for
\nthe selling mood on the Jakarta Stock Exchange.<\/p>\n
\"So far, I think worries in the currency market were the main
\nreason for the selling in the bourse,\" chief dealer at Asian
\nDevelopment Securities said.<\/p>\n
ING Barings Securities' stock analyst Laksono Widodo said most
\nlisted companies were affected by the weakening rupiah because
\nsome of those companies had dollar liabilities. (aly\/rid)<\/p>\n
Bankers -- Page 10<\/p>\n
Turmoil -- Page 11<\/p>\n
Motive -- Page 12<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/bank-indonesia-calls-for-vigilance-over-rupiahs-falls-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }