Rupiah expected to remain stable<\/p>\n
Fitri Wulandari, The Jakarta Post, Jakarta<\/p>\n
The rupiah is expected to hover at between Rp 8,650 and Rp
\n8,700 per U.S. dollar this week amid prevailing positive
\nsentiment and weakening confidence in the greenback, according to
\nan analyst.<\/p>\n
\"As long as there is no negative political news, the rupiah
\nwill stay in this range,\" Fauzi told The Jakarta Post over the
\nweekend.<\/p>\n
The rupiah last week strengthened slightly to Rp 8,615 per
\ndollar, from Rp 8,630 the previous week.<\/p>\n
Fauzi said that on the domestic front, the ongoing stable
\npolitical situation and continuing positive sentiment following
\nthe recent disbursement of the International Monetary Fund's
\nUS$358 million loan tranche to the country would bode well for
\nthe local currency.<\/p>\n
The rupiah has appreciated by around 15 percent against the
\ndollar since the beginning of this year.<\/p>\n
Fauzi added that people generally preferred to hold rupiah
\nfunds because of its higher interest rate compared to dollar
\nfunds.<\/p>\n
\"People prefer to keep rupiah and place it in Bank Indonesia
\nSBI promissory notes or the money market as the interest rate is
\nhigher than (the rate of dollar funds),\" he said. They currently
\ncarry an interest rate of more than 15 percent.<\/p>\n
He said this had helped the rupiah to remain stable at its
\ncurrent level despite fears companies would try to purchase
\ndollars to repay foreign debt.<\/p>\n
He, however, said that such concerns were being exaggerated,
\npointing out that only a third of the $55 billion corporate
\nforeign debts had to be repaid in the near term.<\/p>\n
Fauzi said the region's generally weak sentiment on the U.S.
\ndollar was another factor helping the rupiah.<\/p>\n
In Asia, the U.S. dollar fell across the region, spurred by
\nthe latest accounting scandal by WorldCom.<\/p>\n
Meanwhile, the stock market is expected to rebound this week
\nafter a 3.8 percent drop last week due to profit taking.<\/p>\n
The Jakarta Stock Exchange Composite index dropped 20.85
\npoints to 505.01 points on Friday, from 525.86 points the week
\nbefore.<\/p>\n
\"Most blue chip shares, such as Telkom were corrected last
\nweek, so the trend will be bullish in the coming week due to a
\ntechnical rebound,\" Zulfikar, analyst at Mandiri Securities, told
\nThe Post over the weekend.<\/p>\n
He predicted the composite index could rise by 4 to 5 points
\nin the coming week.<\/p>\n
Last week, daily volume averaged 499.3 million shares valued
\nat Rp 510.3 billion ($59 million) compared to the previous week's
\n607.7 million shares valued at Rp 396 billion.<\/p>\n
Telkom, the state-owned telecommunication firm, fell
\nRp 325 over the week to Rp 3,750. While its competition, state
\ninternational call operator Indosat, closed Rp 700 higher at Rp
\n11,950.<\/p>\n
Cigarette maker Sampoerna dropped Rp 75 over the week to Rp
\n4,1. Its rival Gudang Garam was up Rp 500 to close at Rp 10,550.<\/p>\n
While the U.S stock market was still clouded with yet another
\naccounting scandal by Worldcom, Zulfikar said the fiasco would
\nhave little impact on the country's stock market.<\/p>\n
WorldCom Inc. admitted last week that it improperly booked
\n$3.8 billion of expenses. The scandal has forced foreign
\ninvestors to drop U.S. stocks from their portfolio.<\/p>\n
Fauzi was of the same opinion, saying the scandal would not
\ncause much uproar here like in the U.S.<\/p>\n
\"It caused uproar there because people thought it (the
\nscandal) could not happen, because the U.S. supposedly applies
\nstrict accounting standards,\" he said.<\/p>\n
But it is public knowledge that public accounting is in a mess
\nhere, Fauzi added.<\/p>",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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