Rupiah beefs up to 9,500 against dollar<\/p>\n
JAKARTA (JP): The rupiah broke through the 10,000 key
\npsychological level against the U.S. dollar on Wednesday to hit
\n9,500 -- the highest level since former President Soeharto
\nresigned in May.<\/p>\n
Currency dealers said fresh market talks of a possible
\nimposition of capital controls, hopes of slowing the inflation
\nrate and regional strength helped boost the rupiah standing.<\/p>\n
A local bank's chief dealer said, "Among those factors, I
\nthink the bullish trend in the regional markets is the dominant
\nfactor behind the rupiah's strong gain today."<\/p>\n
The rupiah continued to gather steam after breaking the
\nresistance level of 10,600 to the dollar on Tuesday and hitting
\nthe 10,000 mark on Wednesday.<\/p>\n
"It is just a psychological game. The rupiah could easily gain
\nground after it has broken several psychological barriers," the
\nchief dealer said.<\/p>\n
Coordinating Minister for Economy, Finance and Industry
\nGinandjar Kartasasmita said in Manila on Wednesday that
\nconfidence was returning to the rupiah but warned against an
\noverly sharp appreciation in the currency.<\/p>\n
But, he added, "I'm very happy about the direction."<\/p>\n
Ginandjar, in Manila to attend a meeting of trade ministers
\nfrom the Association of Southeast Asian Nations, said the
\ngovernment wants to see a "gradual" appreciation in the currency.<\/p>\n
"For instance, we don't want to see the rupiah jump to 8,000,"
\nGinandjar was quoted by Associated Press.<\/p>\n
Pentasena Securities' head of research, Mohammad Syahrial,
\nsaid that even at a rupiah rate of 8,000 to the dollar, 260 of
\nthe 282 firms on the Jakarta Stock Exchange (JSX) would still be
\ntechnically bankrupt.<\/p>\n
The rupiah was traded at 8,000 to the dollar in early May but
\nshot to 12,000 just days before the downfall of Soeharto on May
\n21. Since then, the rupiah continued to weakened to 15,000.<\/p>\n
The currency started to stage a recovery in July, when
\nmultilateral financial institutions and donor countries pledged
\nto pump in billions of dollars in loans.<\/p>\n
As the government, through state banks, convert dollars to
\nrupiah, the local currency has steadily risen.<\/p>\n
The currency is also benefiting from the signs of waning
\nsocial unrest and antigovernment demonstrations.<\/p>\n
However, dealers warned that the rupiah's sharp rise would be
\ncapped in the coming days when the Indonesian Democratic Party
\n(PDI) led by ousted leader Megawati Soekarnoputri holds its
\ncongress.<\/p>\n
A dealer with another local private bank said, "If PDI's
\ncongress runs peacefully in Bali, the rupiah will probably
\nstrengthen to 8,000."<\/p>\n
Like the rupiah, stock prices on the shattered local market
\nrose Wednesday, with the benchmark price index rising 8.06 points
\nto 266.17 on a total turnover of 130.87 million shares, valued at
\nRp 146.29 billion, changing hands.<\/p>\n
Gainers led loses by 56 to 27, with 82 remaining unchanged.<\/p>\n
Stockbrokers and analysts said that some investors took
\nadvantage of a stronger regional market to purchase certain
\nselected stocks which had been undervalued due to persistent
\nselling pressures over the past few weeks.<\/p>\n
Mashill Jaya Securities' head of research, Edhi S. Widjojo,
\nsaid the slight increase in stock prices was not supported by
\nstrong fundamentals of most companies but was speculative in
\nnature.<\/p>\n
"Some short-term investors will take profits in the coming
\ndays on gains they made today (Wednesday)," he said. (aly\/rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/rupiah-beefs-up-to-9500-against-dollar-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}