Rupiah breaches 4,000 barrier<\/p>\n
JAKARTA (JP): The rupiah hit another new record low yesterday,
\nbreaking the 4,000 psychological level in midday trading while
\nthe stock market gained ground, dealers and brokers said.<\/p>\n
Currency dealers said the drop in the rupiah was driven by a
\ncombination of regional weaknesses and increasing dollar demand
\nby indebted local corporations.<\/p>\n
The rupiah, which opened at 3930\/50, touched a new historic
\nlow of 4,020 against the U.S. dollar in the spot market during a
\nlunch break despite a market intervention by Bank Indonesia in
\nthe morning.<\/p>\n
The currency recovered slightly to close at 3,970\/90 following
\na rebound in the Malaysian ringgit, dealers said.<\/p>\n
\"We were not surprised when the rupiah broke the 4,000 barrier
\nbecause we had anticipated it,\" a local private bank chief dealer
\nsaid.<\/p>\n
Bank Indonesia managing director Paul Soetopo Tjokronegoro
\nconfirmed yesterday the central bank had intervened in the market
\nto shore up the rupiah.<\/p>\n
\"It should be noted that our market intervention now is not to
\ndefend the rupiah at a certain level anymore but to avoid sharp
\nfluctuation,\" Paul told journalists after attending a meeting
\nbetween the finance minister and businesspeople.<\/p>\n
Paul acknowledged that the central bank had intervened in the
\ncurrency market several times to supply more dollars to the
\nmarket.<\/p>\n
\"If the demand (for dollars) is too much, we prefer not to
\nintervene because it would be futile. The principle is don't move
\nagainst the market,\" he added.<\/p>\n
He said the central bank had to supply more dollars to the
\ncurrency market as the supply was currently still very short due
\nto the reluctance of exporters to release their dollar holdings.<\/p>\n
Bank Indonesia has issued a swap facility for exporters to
\nencourage them to unload their dollars in the market.<\/p>\n
When asked about the size of the intervention, Paul said, \"it
\nwasn't that much, not like when we conducted a joint intervention
\ntogether with Japan and Singapore.\"<\/p>\n
Earlier last month, Bank Indonesia conducted a concerted
\nintervention together with the Monetary Authority of Singapore
\nand the Bank of Japan to support the rupiah.<\/p>\n
Despite continuing interventions, Paul said, the country's
\nforeign exchange reserves remained strong.<\/p>\n
Currency dealers said pressure on the rupiah -- and also on
\nother regional currencies -- would remain strong until the end of
\nthis month because more and more corporations would enter the
\ncurrency market to purchase dollars to pay for their due debts.<\/p>\n
Yesterday, Finance Minister Mar'ie Muhammad and several
\ninfluential businesspeople agreed to conduct joint road shows
\noverseas to seek possible rollovers from creditors for the
\nprivate sector's offshore maturing debts.<\/p>\n
The negative sentiment in the currency market did not affect
\nthe Jakarta Stock Exchange (JSX).<\/p>\n
The JSX composite index gained 3.1 percent or 12.85 points to
\nclose at 414.77 with a total turnover of 373.32 million shares
\nworth Rp 389.23 billion (US$97.3 million).<\/p>\n
A broker from Harita securities described yesterday's gain as
\na short-term technical rebound, supported by the rise of regional
\nstock markets.<\/p>\n
Other brokers attributed the rebound to support given by
\nstate-owned enterprises.<\/p>\n
Brokers said they had seen state-owned Danareksa Sekuritas and
\nBahana Securities buying large-cap stocks to prop up the index.<\/p>\n
President Soeharto was quoted by businessman Aburizal Bakrie
\nlast month as saying he had instructed state-owned companies to
\nspend 1 percent of their profits to buy shares or mutual funds
\nfrom the market. (aly\/rid)<\/p>\n
Related stories on Page 10 and 11<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/rupiah-breaches-4000-barrier-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }