Rupiah continues to fall as other currencies recover<\/p>\n
Dadan Wijaksana, Jakarta<\/p>\n
The rupiah continued to falter on Thursday and ended at a
\nfresh 19-month low, showing no sign of a rebound at a time when
\nother currencies in the region started to regain ground against
\nthe U.S. dollar.<\/p>\n
The local unit closed at 9,290 per dollar, down from 9,275 the
\nday before -- the weakest since Oct. 14, 2002 -- with dealers
\npointing fingers in part at local firms building up their dollar
\nstocks to cover debt repayment and the cost of imports.<\/p>\n
The companies continued to buy dollars on fears that the local
\ncurrency could fall further in anticipation of an imminent rise
\nin the U.S. benchmark interest rate -- which should make dollar-
\ndominated assets a more attractive investment.<\/p>\n
\"So, I guess this is their way of stemming or reducing the
\nlosses they have suffered from the rupiah's recent decline,\" a
\ndealer at a state bank said on Thursday.<\/p>\n
Thursday's drop capped the rupiah's shaky showing in recent
\nweeks, while regional peers have managed to recover from U.S.
\ndollar pressure, which recently picked up on optimism about the
\nU.S. economy.<\/p>\n
The local unit has so far depreciated by close to 9 percent
\nsince January, a loss that exceeds the gain of 7 percent it made
\nlast year.<\/p>\n
In comparison, on Thursday, the Singapore dollar ended at its
\nhighest level for more than two weeks while the Philippine peso
\nalso gained. The most impressive showing was probably shown by
\nthe Korean won, which closed as its highest level for three
\nweeks.<\/p>\n
In addition to external factors, the dealer said the rupiah
\nhad also fallen victim to the country's heightened political
\natmosphere in the run-up to the unprecedented, direct
\npresidential elections.<\/p>\n
Indonesia will hold the elections on July 5, with a possible
\nrunoff on Sept. 20, should the winner in the first stage of
\nvoting fail to secure at least 50 percent of the vote.<\/p>\n
Despite all the pressure, Bank Indonesia says it has yet to
\nconsider raising its one-month promissory note (SBI) interest
\nrate, provided the U.S. Federal Reserve's interest rate hike was
\nno greater than 0.25 percent.<\/p>\n
Analysts have said that, among other things, a rise in SBI
\nrate should help stem rupiah depreciation to draw interest in
\nholding the rupiah.<\/p>\n
Turning to the stock market, the Jakarta stock index took
\nadvantage of gains posted in Asian markets, closing higher for
\nthe second day in a row.<\/p>\n
The index ended 1.4 percent higher at 728.31 points from the
\nprevious day, as a blue-chip share sell-off sparked the market,
\ndealers said.<\/p>\n
Cigarette giant Gudang Garam led the 67 gainers on the day
\nafter rising by 4.1 percent, or Rp 550, to close at Rp 14,100.<\/p>\n
The country's largest and second-largest telecommunications
\nfirms -- Telkom and Indosat -- were also among the gainers, up by
\n2.1 percent and 3.9 percent to close at Rp 7,350 and Rp 4,000
\nrespectively.<\/p>\n
Astra International, the nation's largest auto maker, closed
\nat Rp 5,750, 1.8 percent higher than the previous close.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/rupiah-continues-to-fall-as-other-currencies-recover-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}