Rupiah ends the week on weaker footing<\/p>\n
The Jakarta Post
\nJakarta<\/p>\n
The rupiah ended flat on Friday on late profit taking but still
\ncapped this week's trading on a weaker footing after dropping 1
\npercent of its value against the U.S. dollar.<\/p>\n
The local currency closed the day unchanged from Thursday's
\nclosing at Rp 8,510 per U.S. dollar, recovering from an intraday
\nlow of 8,565 as companies brought dollars for month-end debt
\nservicing and imports financing.<\/p>\n
Dealers, however, have said the local unit's rebound is just
\naround the corner as the market sentiment toward the economy has
\nactually been positive, in parallel with continued improvement in
\nthe macroeconomic picture.<\/p>\n
Progress made by authorities in uncovering the culprits behind
\nthe recent bomb attack would also help increase confidence, they
\nsaid. The government's aggressive response in cracking down on
\nthe alleged terrorists has resulted in a number of arrests.<\/p>\n
Bank Indonesia, which has been on the front line in guarding
\nthe local unit weathering shock after shock, was also optimistic
\nabout the rupiah's outlook.<\/p>\n
Bank Indonesia remains comfortable with the current
\ndevelopment in the rupiah, saying it had no urgency to intervene
\nin the currency market.<\/p>\n
\"For the time being, we do not need to intervene because the
\nmacroecomic picture is good,\" Bank Indonesia deputy governor
\nAslim Tadjudin told reporters, adding that the falling rupiah was
\ncaused by demands from corporations and did not reflect the
\noverall sentiment on the rupiah.<\/p>\n
Aslim added the continued decline in Bank Indonesia's interest
\nrate and benign inflation environment would not be underrated by
\ninvestors.<\/p>\n
The central bank's benchmark interest rate now stands at 8.91
\npercent, while the January-July inflation at 1.26 percent, both
\nof which are at historic lows.<\/p>\n
In fact, despite recent depreciation, the rupiah remains more
\nthan 4 percent stronger than it was at the start of the year,
\nalthough it is slightly lower than Rp 8,490 -- the level posted
\nthe day before the JW Marriott Hotel Bombing.<\/p>\n
Nevertheless, this week's weaker rupiah has taken its toll, at
\nleast at the local stock market.<\/p>\n
On Friday, the Jakarta Composite Index was down mostly on the
\nweaker rupiah, which was accelerated by profit-taking actions on
\nselected blue-chip shares.<\/p>\n
It ended down 0.1 percent lower than the day earlier at 529.58
\npoints.<\/p>\n
\"It (the weaker rupiah) is seen to cause further troubles for
\nindebted local companies, notably with those dollar-dominated
\nones,\" a dealer said.<\/p>\n
The outlook for next week however, he added, remained positive
\non expectation of the rupiah's recovery.<\/p>",
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