Rupiah ends at eight-month low on dollar demand<\/p>\n
Jakarta, Dow Jones<\/p>\n
The rupiah ended at an eight-month low on Tuesday on robust
\nmonth-end dollar demand and continued selloffs in local stocks,
\ndealers said.<\/p>\n
A powerful 8.7-magnitude earthquake that devastated a small
\nisland off North Sumatra on Monday night added to the negative
\nsentiment in the local unit, they added.<\/p>\n
The dollar closed at Rp 9,505, up from Monday's close of Rp
\n9,435. The last time the dollar closed around Rp 9,505 was in
\nearly June 2004.<\/p>\n
They said most of the dollar demand came from local units of
\nmultinational corporations operating in Indonesia, especially
\nJapanese ones, as they will be expatriating profits at the end of
\nthis month.<\/p>\n
"The dollar demand from foreign equity investors were also
\nquite significant following the continued slide on the local
\nstock market," a dealer with a foreign bank said.<\/p>\n
The Jakarta Stock Exchange Composite Index fell 2.7 percent
\nTuesday amid expectations of rising interest rates in the U.S.
\nand Indonesia, dealers said.<\/p>\n
Expectation of rising rates also led to a cancellation of the
\ngovernment's Rp2 trillion bond auction as investors were
\ndemanding high yields.<\/p>\n
Dealers said that news of the latest disaster in Nias Island,
\nwhere hundreds are feared dead, added to the negative mood on the
\nrupiah as it could raise the reconstruction costs associated with
\nthe December tsunami. The immediate impact of the latest calamity
\non the national economy, however, is expected to be insignificant
\nas there are no major industries in the affected area.<\/p>\n
Dealers said Bank Indonesia intervened to slow the dollar's
\nrise Tuesday, but they estimated the amount of dollars the
\ncentral bank unloaded was small.<\/p>\n
Bank Indonesia is believed to often enter the market when the
\nlocal unit is under selling pressure.<\/p>\n
Dealers expect the dollar to trade between Rp 9,475 and Rp
\n9,550 on Wednesday, with Bank Indonesia expected to sell the
\ngreenback again.<\/p>\n
Meanwhile, concerns of the earthquake impacts, and lingering
\nworries that the central bank may raise interest rates to combat
\nrising inflation and defend the rupiah, pushed the index down.<\/p>\n
The Jakarta Stock Exchange Composite Index ended down 29.940
\npoints, or 2.6 percent, at 1070.30 , up slightly from an intraday
\nlow of 1056.51.<\/p>\n
"The market worried that the reconstruction costs stemming
\nfrom the earthquake will further hurt the 2005 state budget,"
\nsaid an analyst with Kuo Capital Securities.<\/p>\n
Decliners led gainers 162 to 12, with 43 stocks unchanged.<\/p>\n
Volume was 4.2 billion shares valued at Rp 3.3 trillion,
\ncompared with 2 billion shares valued at Rp 1.6 trillion on
\nMonday.<\/p>\n
Dealers said investors continued to sell bank stocks on
\nworries that higher interest rates would hurt the banks'
\nfinancial performance.<\/p>\n
Bank Mandiri, the nation's largest lender, fell 1.2 percent to
\nRp 1,670, Bank Negara Indonesia (BNI) lost 3.9 percent to Rp
\n1,720, and Bank Danamon dropped 5.7 percent to Rp 4,575.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/rupiah-ends-at-eight-month-low-on-dollar-demand-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}