IBRA sales predicted to lift rupiah<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
After strengthening slightly last week, the rupiah still has a
\ngood chance of riding the positive momentum this week, as the
\nsupply for dollars in the market is likely to remain strong,
\noverweighing its demand, analysts said.<\/p>\n
\"The rupiah will continue to strengthen this week, as the
\ndollar supply will come from winning bidders in the Indonesian
\nBank Restructuring Agency's (IBRA) asset sale program making
\ntheir payments. Although the increase will not be drastic,\" Pardi
\nKendy told The Jakarta Post over the weekend.<\/p>\n
Late last month, IBRA sold Rp 145 trillion worth of non-
\nperforming bank loans for around Rp 17.7 trillion. The loans were
\ntaken over from ailing banks in the late 1990s.<\/p>\n
Almost half the winning bidders are foreign and they are
\nexpected to bring in U.S. dollars and covert them into the local
\nunit to make their payments, which will provide some support for
\nthe rupiah.<\/p>\n
It was the same kind of capital inflows that strengthened the
\nlocal currency last week against the U.S. currency.<\/p>\n
The rupiah closed last week at Rp 8,960 per dollar, slightly
\nhigher than Rp 9,085 the week before.<\/p>\n
Pardi added that the dollar demand from indebted companies
\nwould be relatively low and would not pose a significant threat
\nto the rupiah.<\/p>\n
\"Corporations usually start collecting dollars by the end of
\nthe month. So, my guess is demand (for dollars) will be low this
\nweek,\" he said.<\/p>\n
A dealer at a foreign bank agreed, saying the demand for
\ndollars this week would only come from corporations to finance
\nimports, not for the payment of overseas debts.<\/p>\n
\"This should be OK for the rupiah, as (dollar) demands for
\nimports are likely to remain low,\" he added.<\/p>\n
Both Pardi and the foreign dealer pointed at another potential
\npositive factor for the rupiah: A positive review by the
\nInternational Monetary Fund on the country's economic reform
\nprogram.<\/p>\n
An IMF team has just completed a week-long visit to review the
\ncountry's progress in implementing key macroeconomic reform
\nprograms. Compliance would pave the way for the disbursement of
\nthe next IMF loan tranche.<\/p>\n
The IMF has been providing a $5 billion bailout loan for
\nIndonesia, in return for the implementation of certain economic
\nreform measures and the meeting of economic targets. So far, the
\ncountry has received $2.6 billion.<\/p>\n
Continuing support from the IMF would give the rupiah a much-
\nneeded boost, said Pardi, who's also the director of Bank Buana.<\/p>\n
Meanwhile, the stock market is expected to move sideways with
\nplayers applying a wait-and-see stance on continued concerns over
\nthe movement of shares on Wall Street, an analyst said.<\/p>\n
Positive news is also expected from the upcoming U.S. Federal
\nReserves meeting, according to stock analyst Erwinda Anggraini.<\/p>\n
\"The meeting is likely to result in the cutting of the (Fed)
\ninterest rates,\" Erwinda told the Post.<\/p>\n
The Jakarta Stock Exchange Composite index ended last week at
\n450.236, down 6.079 points or 1.3 percent from the previous week.<\/p>\n
Last week's daily volume averaged 672.64 million shares valued
\nat Rp 375.26 billion, compared to the previous week's 593.96
\nmillion shares valued at Rp 429.98 billion.<\/p>\n
State-owned telecommunication firm PT Telkom was up Rp 75 over
\nthe week at Rp 3,725 while PT Indosat was up Rp 400 at Rp 8,650.<\/p>\n
Cigarette-maker Sampoerna was up Rp 25 over the week at Rp
\n4,025 while rival Gudang Garam ended flat at Rp 9,200.<\/p>",
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