Rupiah again passes 6,000 level as stocks strengthen<\/p>\n
JAKARTA (JP): The rupiah continued to decline further against
\nthe American dollar on the first trading day of 1998 yesterday,
\npassing the 6,000 barrier on continuing corporate demand for the
\ngreenback.<\/p>\n
Stock prices on the Jakarta Stock Exchange (JSX) gained ground
\non window-dressing activities, with the main index closing 2.07
\npercent higher.<\/p>\n
Currency dealers said corporate dollar buying to pay dollar-
\ndenominated debts remained high in the currency market, pushing
\nthe rupiah further down.<\/p>\n
Dealers said that the central bank was not seen in the market
\nyesterday.<\/p>\n
Spot rupiah closed at 5,850\/5,925 to the greenback after
\nplunging to a day low of 6,075 in the morning, compared to the
\nopening of 5,650\/5,850.<\/p>\n
\"It is really difficult to see the direction of the rupiah
\nthough people expected to see a strengthening rupiah at the
\nbeginning of this year,\" a dealer with a local private bank said.<\/p>\n
\"The market is still determined by demand and supply
\nprinciples; fundamentals do not speak yet in the market,\" a chief
\ndealer with a local private bank said.<\/p>\n
But most dealers said that trading remained thin as many
\noperators were still on their yearend holidays.<\/p>\n
Trading volume was expected to rise next week as more and more
\nindebted firms would enter the market to cover their positions,
\nthey said.<\/p>\n
Many analysts have blamed the indebted corporations for the
\nsharp depreciation of the rupiah against the U.S. dollar. The
\nrupiah has lost 55 percent of its value against the greenback
\nsince last July.<\/p>\n
The government has said that Indonesia's private offshore
\ndebts total US$65 billion, accounting for 55 percent of the
\ncountry's total debts of $118 billion.<\/p>\n
The president of Paribas Asia Equity, Jasereh James Spence,
\nsaid in a statement yesterday that previous reports about
\nIndonesia's total debts which stood at US$200 billion were
\ngroundless.<\/p>\n
\"The inclusion of the rupiah-denominated papers held in
\nforeign hands would increase the official estimate of US$117
\nbillion by a maximum of $10 billion which would result in total
\nindebtedness in both rupiah and foreign currencies of around $130
\nbillion,\" he said.<\/p>\n
Dealers also attributed the weakening of the rupiah to the
\ndowngrade by Standard & Poor's on Indonesia's long-term foreign
\ncurrency rating to BB-plus from BBB-minus and its local currency
\nrating to BBB-plus from A-minus.<\/p>\n
As the rupiah weakened, stock prices on the JSX gained 2.07
\npercent, with the JSX composite index rising 8.29 points to close
\nat 410.01.<\/p>\n
Total turnover was 161.67 million shares changing hands on the
\nregular market, valued at Rp 173.07 billion (US$29.83 million).<\/p>\n
Stockbrokers said that the market opened 1998 trading with an
\nexpectation of a better 1998\/1999 state budget to be announced by
\nPresident Soeharto on Jan. 6.<\/p>\n
\"I think the increase in stock prices is due to a positive
\nexpectation for the announcement of the 1998\/1999 state budget
\nnext week,\" Karman Pamurahardjo, an analyst from Harita
\nSecurities, said.<\/p>\n
Karman said overall market sentiment remained negative given
\nthe persistent weakening of the rupiah in the currency market.<\/p>\n
Stock brokers said the government's decision to announce the
\nmerger of four state banks on Wednesday slightly boosted prices
\nof most banking stocks yesterday.<\/p>\n
But the real impact of the merger would be felt when its full
\ndetails were disclosed by the government later this year.
\n(aly\/rid)<\/p>\n
Currencies -- Page 11<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/rupiah-again-passes-6000-level-as-stocks-strengthen-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }