Rupiah and stock prices continue to drop<\/p>\n
JAKARTA (JP): The rupiah and stock prices continued to drop
\nyesterday following rioting in Ujungpandang, South Sulawesi and
\nongoing regional weaknesses, dealers and brokers said.<\/p>\n
Despite positive signals sent by the government Tuesday, the
\nfate of the currency and stock markets were still largely
\ndependent on regional trends, they said.<\/p>\n
Sentiments were still in favor of the U.S. dollar, with local
\nand foreign players keeping their dollar holding.<\/p>\n
Spot rupiah closed at 2,980\/2,985 against the U.S. dollar
\nyesterday, compared with an opening of 2,970\/2,978 and Tuesday's
\nclose of 2,950.<\/p>\n
Meanwhile, share prices on the Jakarta Stock Exchange dropped
\nby 1.51 percent, with the composite index falling 8.09 points to
\nclose at 526.74.<\/p>\n
Total trading turnover was Rp 289 billion (US$97.90 million),
\ncompared with a usual daily trading volume of over Rp 500
\nbillion.<\/p>\n
A stock analyst with a joint venture brokerage firm said
\ntrading activities on the exchange were meager because most
\ninvestors stayed on the sidelines due to the Ujungpandang riots,
\nspending cuts and further weakening of the rupiah.<\/p>\n
He said government measures so far, including a US$35.60
\nproject rescheduling, should be enough to convince investors the
\ngovernment was serious in dealing with the currency and stock
\nmarket upheavals.<\/p>\n
But investors, especially foreign investors, were disappointed
\nwith the government's unfulfilled promise to dismantle the
\nNational Logistic Agency's (Bulog) trading monopoly on a number
\nof agricultural products.<\/p>\n
Foreign investors were also dissatisfied with the government's
\ndecision not to reschedule the national car project.<\/p>\n
"For us, Indonesian investors, it is understandable that the
\nnational car project will go on and Bulog's monopoly will remain
\nand we are satisfied enough with what the government has done so
\nfar," he said.<\/p>\n
He said the main concern now was how to stabilize the currency
\nand reduce banking interest rates to boost the stock market and
\nbusinesses in general.<\/p>\n
Meanwhile, currency dealers said further slides in Malaysian
\nringgit and Thai baht continued to undermine rupiah sentiment
\nyesterday.<\/p>\n
Tomorrow and today rupiah closed at 2,981\/2,986 and
\n2,980\/2,985, respectively.<\/p>\n
But dealers warned the rupiah's continuing decline was
\nslightly exaggerated by thin trading volume, at one or two
\nmillion dollars.<\/p>\n
"The market was very quite today. It was practically closed at
\n3:30 p.m. as nobody quoted new prices until then," a local bank
\ndealer said.<\/p>\n
He said most local players were reluctant to open a new
\nposition given the current uncertainty as they did not want to
\nrisk further losses.<\/p>\n
Dealers said sustained domestic demand for dollars limited the
\ndownside risks for the U.S. currency, adding the 3,000 barrier
\ncould again be tested.<\/p>\n
They said offshore operators had guarded the rupiah at the
\n2,980 level for days, but strong local demand seemed to outweigh
\ntheir endurance.<\/p>\n
Dealers said swap rates drifted lower on improved rupiah
\nliquidity and the possibility of lower interest rates.<\/p>\n
Overnight rupiah was between 20 percent and 25 percent.
\nTom\/next swap at 0.9\/1.0 points. One-week swap was at 6.50\/6.75,
\none-month at 33\/37, two at 68\/77, three at 100\/105, six at
\n190\/197 and one-year at 340\/380 points. (aly\/rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/rupiah-and-stock-prices-continue-to-drop-1447893297",
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