High demand for dollars sends rupiah to new low<\/p>\n
JAKARTA (JP): The high demand for U.S. dollars from local
\ncompanies dragged the rupiah down further yesterday to a new low
\nof 10,500 against the greenback in morning trade, dealers said.<\/p>\n
Dealers said the rupiah managed to recover in the afternoon on
\nnews that the German government would help Indonesia settle
\noffshore loans in the private sector.<\/p>\n
The spot rupiah recovered to close at 9,650\/9,975 in Jakarta
\nagainst an opening of 10,100\/10,200.<\/p>\n
Horst Kohler, a special envoy of Germany's Chancellor Helmut
\nKohl, said here yesterday he would propose to Kohl to ask German
\nbanks to contribute constructively to a solution to the foreign
\ndebt problem of the Indonesian private sector.<\/p>\n
Kohler, who is leading a special German delegation here to
\nassess Indonesia's economic situation, said finding a rapid
\nsolution to Indonesia's private offshore debt was of crucial
\nimportance in dealing with the economic crisis.<\/p>\n
Foreign and local analysts have also said the recovery of the
\nrupiah would depend largely on the handling of the country's huge
\nprivate debt.<\/p>\n
\"Without such a solution, the Indonesian currency will decline
\nfurther,\" Kohler said.<\/p>\n
According to a government estimate, the offshore debt of the
\nIndonesian private sector was US$65 billion as of September last
\nyear. Most of the loans were short-term debts with a maturity of
\nbetween one and two years.<\/p>\n
\"News on further banking mergers is good, but since there is
\nno clear solution to the private sector debt, the rupiah fell
\nfurther,\" a chief dealer with a local private bank said.<\/p>\n
Some analysts suggested the debt moratorium could be part of a
\nsolution to the country's mounting external debt.<\/p>\n
\"With that, Indonesian corporations will have enough time to
\nrestructure their debts,\" the dealer said.<\/p>\n
Analysts said uncertainty about the country's future vice
\npresident also contributed to the rupiah's free fall.<\/p>\n
\"Investors are waiting for the announcement of the new vice
\npresident,\" one analyst said. He said President Soeharto's
\nannouncement that he was ready to be reelected was not strong
\nenough to ensure jittery investors.<\/p>\n
\"Sporadic riots in small towns in East Java also put more
\npressure on the rupiah,\" a chief dealer with a local private bank
\nsaid.<\/p>\n
Dealers also attributed the weakened rupiah to Standard &
\nPoor's report about the poor performance of the country's banking
\nsystem.<\/p>\n
According to the U.S.-based rating agency, Indonesia needs
\nabout $15 billion in fresh capital to cope with the sharp
\ndeterioration of the local currency.<\/p>\n
As the rupiah fell, stock prices on the Jakarta Stock Exchange
\n(JSX) rose 2.05 percent, supported by a late rally on banking
\nstocks on expectations of more bank mergers and buoyant trading
\nin blue-ship stocks, brokers said.<\/p>\n
The JSX composite index surged 9.01 points to 448.03 yesterday
\nfrom 439.01 the previous day with 498.91 million shares changing
\nhands worth Rp 537.74 billion ($56.6 million). (aly)<\/p>\n
German envoy -- Page 8<\/p>\n
Currencies -- Page 9<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/high-demand-for-dollars-sends-rupiah-to-new-low-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }