Rupiah ends lower on oil imports<\/p>\n
Dow Jones, Jakarta<\/p>\n
The rupiah closed lower on Thursday due to what dealers
\nattributed to state oil and gas firm PT Pertamina's re-entry into
\nthe currency market to purchase dollars for oil imports.<\/p>\n
The dollar closed at Rp 9,823, compared with Rp 9,770 on
\nWednesday. The dollar hit a high of Rp 9,825 during intraday
\ntrading.<\/p>\n
The rupiah opened higher at Rp 9,755 as the market tracked a
\nrising Japanese yen against the U.S. dollar and as corporate
\nbought rupiah to fund tax obligations that come due Friday.<\/p>\n
But the rupiah's strength withered under the pressure of oil
\nimport-related dollar-buying, traders said.<\/p>\n
\"I heard that there was some dollar purchasing by Pertamina,
\nand that weighed on the rupiah,\" a dealer at a foreign bank said.<\/p>\n
Pertamina's return to the currency market to fund oil imports
\nindicates that a Bank Indonesia move in July to directly supply
\nthe firm with dollars for oil purchases cannot cope with the
\ncombination of surging domestic fuel demand and record-high crude
\noil prices hovering around US$60 per barrel.<\/p>\n
September prices for Nymex crude are down 36 U.S. cents on
\nThursday to $64.54 per barrel.<\/p>\n
Analysts and government officials have blamed Pertamina's
\nvoracious dollar appetite for a 5 percent decline in the rupiah
\nagainst the dollar since the start of 2005.<\/p>\n
Central bank intervention to support the rupiah has cost the
\ngovernment about $5 billion this year, or 14 percent of total
\nforeign-exchange reserves. Bank Indonesia hiked its benchmark
\nrate on Tuesday to 8.75 percent from 8.50 percent to tame the
\ninflation that has exacerbated the rupiah's weakness.<\/p>\n
Dealers said the rupiah will continue to lose traction against
\nthe rupiah on Friday if Pertamina returns to the currency market
\nto buy dollars.<\/p>\n
\"With oil prices going steadily higher, Pertamina's demand
\nwill weigh on the rupiah,\" a dealer said.<\/p>\n
Dealers expect the dollar to trade between Rp 9,780 and Rp
\n9,830 on Friday.<\/p>\n
Meanwhile, shares ended lower on Thursday, led by selling in
\nautomotive company Astra International and PT Telekomunikasi
\nIndonesia (Telkom).<\/p>\n
Dealers said news that the government plans to hike fuel
\nprices early next year hurt overall sentiment, spurring swift
\nprofit taking in most blue chips after gains in the previous two
\nsessions.<\/p>\n
\"There were fears high fuel prices could push up cost of
\noperations and hurt net profit of many companies,\" said a trader
\nwith a local securities firm.<\/p>\n
The Jakarta Stock Exchange's Composite Index fell 0.8 percent,
\nor 8.866 points, to 1167.962.<\/p>\n
Decliners led gainers 89 to 32, with 76 stocks unchanged.
\nVolume fell to 1.5 billion shares valued at Rp 1.2 trillion,
\ncompared with 1.8 billion shares valued at Rp 1.5 trillion on
\nWednesday.<\/p>\n
Astra lost 3 percent to Rp 11,500, on growing worries its
\nsecond-half earnings this year will be eroded by high interest
\nrates, which could discourage people from buying motorcycles and
\ncars on credit.<\/p>\n
Bellwether Telkom lost 1.8 percent to Rp 5,550 after Morgan
\nStanley cut its view to equal weight from overweight, as the risk
\nof substitution of fixed-line phones for mobile services is
\nrising. Telkom's rival Indosat dropped 1.7 percent to Rp 5,750.<\/p>\n
Profit taking also hit cement maker Semen Gresik, which lost
\n2.5 percent to Rp 17,900 after gains in the previous two
\nsessions.<\/p>\n
Heavy equipment companies such as United Tractors and Hexindo
\nAdiperkasa bucked the trend as foreign investors switched their
\ninvestments to these issues after Komatsu Indonesia said it plans
\nto go private.<\/p>\n
United Tractors rose 3.9 percent to Rp 4,625, while Hexindo
\njumped 16 percent to Rp 6,550.<\/p>\n
Dealers said they expect shares to trade flat to lower on
\nFriday, led by further selling in Telkom.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/rupiah-ends-lower-on-oil-imports-1447893297",
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"sponsor": "Okusi Associates",
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