Rupiah breaks 3,700 barrier against dollar<\/p>\n
JAKARTA (JP): The rupiah broke yesterday the 3,700 barrier as
\nthe rush for U.S. dollars continued on the local foreign currency
\nmarket.<\/p>\n
Foreign exchange dealers said the rupiah plunged to a new
\nhistoric low of 3,725 against the American dollar in midday
\ntrading but it managed to recover in the afternoon to close at
\n3,640\/50, a 7 percent drop from its 3,395\/3.405 opening.<\/p>\n
The dealers attributed the worsening of the rupiah's value to
\na continued increase in the demand for U.S. dollars.<\/p>\n
"I think the market is getting more nervous as more and more
\ncompanies join the dollar purchases," Bank Bali's chief dealer
\nSuriyanto said.<\/p>\n
The rupiah's value has declined by more than 50 percent
\nagainst the U.S. dollar following speculative attacks on the
\nrupiah since early July.<\/p>\n
Bank Indonesia Governor J. Soedradjad Djiwandono partly blamed
\nyesterday the continued drop in the rupiah on the rush for dollar
\nmade by local companies, in addition to the domino effect of the
\nfall in other regional currencies.<\/p>\n
"It is not only rupiah that has depreciated against the
\nAmerican dollar... but all other currencies in the region," he
\ntold journalists when announcing the central bank's new forex
\ntrading facility.<\/p>\n
He said the new facility, which includes swap incentives to
\nexport-oriented companies, was introduced to help end the rush on
\ndollar.<\/p>\n
But the central bank governor could not predict when the
\ncurrency turmoil would end, saying the rupiah was unpredictable.<\/p>\n
"Be it government officials or economists... please don't be
\nso haughty," he said when asked if the rupiah rate was reaching
\nits new equilibrium level.<\/p>\n
Soedradjad said yesterday the central bank would intervene in
\nthe market if conditions allowed.<\/p>\n
Currency dealers said the volume of the forex transaction in
\nthe foreign exchange market was relatively meager yesterday
\nhovering between US$200 million and US$300 million.<\/p>\n
"In terms of volume, it is relatively small... similar to the
\nvolume in previous days," Suriyanto said.<\/p>\n
The weakening rupiah also had a negative impact on stock
\ntrading.<\/p>\n
The Jakarta Stock Exchange's Composite Index lost about 4
\npercent to close at 515.47 percent in thin trading, with 437.17
\nmillion shares changing hands at Rp 481.11 billion ($141.50
\nmillion).<\/p>\n
Securities analysts and brokers attributed the plunge of share
\nprices to the weakening rupiah in the currency market.<\/p>\n
"I think that most people were in panic selling mode yesterday
\nas the rupiah continued to weaken," an analyst with Penthasena
\nSecurities said.<\/p>\n
Brokers also attributed the fall of stock prices to growing
\nmarket talk of a banking default in the country.<\/p>\n
"There is growing market talk about a banking breach in
\nIndonesia... and this sent negative sentiment to the market," a
\nbroker with a joint brokerage house said.<\/p>\n
Most blue chip stocks ended lower yesterday with satellite
\noperator Indosat falling by Rp 200 to Rp 8,500, Telkom by
\nRp 75 to Rp 3,450, cigarette maker Gudang Garam by Rp 275 to Rp
\n9,275, Sampoerna by Rp 625 to Rp 5,700, Bank Internasional
\nIndonesia by Rp 100 to Rp 775, Bank Dagang Nasional Indonesia by
\nRp 25 to Rp 600 and Bank Negara Indonesia by Rp 75 to Rp 800.
\n(aly)<\/p>\n
Related stories on Page 11<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/rupiah-breaks-3700-barrier-against-dollar-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }