Rupiah gains ground as stock prices fall further<\/p>\n
JAKARTA (JP): The rupiah extended its gains on Tuesday,
\nclosing firmer at 8,825 against the U.S. dollar in very thin
\ntrading as the stock market continued its slide, falling nearly 1
\npercent.<\/p>\n
Dealers said the rupiah opened at 8,825 and shot up to an
\nintraday high of 8,775 in morning trading as certain offshore
\noperators, particularly those from Singapore, sold their dollars
\nfor the rupiah.<\/p>\n
However, persistent dollar bids by domestic commercial banks,
\napparently to either service their foreign debt obligations or to
\nfinance the importation of raw materials for their customers,
\ncapped any further advances by the rupiah against the dollar.<\/p>\n
\"Domestic dollar demands provided no more leeway for the
\nrupiah to gain ground,\" a chief dealer with a joint venture bank
\nsaid.<\/p>\n
The rupiah closed the day's trading at 8,825, slightly
\nstronger than the previous day's close of 8,900.<\/p>\n
The governor of Bank Indonesia, Sjahril Sabirin, attributed
\nthe strengthening rupiah to the passage of political bills by the
\nHouse of Representatives last week meant to pave the way for the
\ngeneral election in June.<\/p>\n
Speaking to journalists before meeting with President B.J.
\nHabibie on Tuesday, Sjahril also said that the government's
\nclearer position on the bank recapitalization program provided
\nsupport for the rupiah.<\/p>\n
Sjahril also stated that the central bank was ready to defend
\nthe currency if it came under renewed attack by speculators.<\/p>\n
Nevertheless, dealers warned that unresolved problems on the
\ncountry's political and economic fronts, especially ahead of the
\ngeneral election in June, would further dampen the rupiah's
\nalready grim outlook against the American dollar.<\/p>\n
A dealer with a local bank said the rupiah's thin trading
\nvolume, which stood below US$100 million on Tuesday, reflected
\nthe reluctance of offshore operators to enter the country's
\ncurrency market.<\/p>\n
\"I suspect the rupiah will return to the 9,000 level and may
\nweaken further, especially toward the end of this budget year in
\nMarch,\" he said, pointing to the fact that the government had not
\nyet secured the funding to plug the budget deficit in the coming
\nfiscal year.<\/p>\n
Unlike the rupiah, share prices on the Jakarta Stock Exchange
\n(JSX) fell nearly one percent, with the JSX Composite Index
\nfalling 3.94 points to close at 405.16 on a total turnover of
\n162.33 million shares valued at Rp 183.77 billion.<\/p>\n
Losers easily outdistanced gainers 41 to 31 with 85 stocks
\nunchanged.<\/p>\n
Stockbrokers attributed the second consecutive day of
\ndeclining share prices to the absence of any fresh leads from the
\ndomestic market coupled with a general plunge in regional equity
\nmarkets.<\/p>\n
\"Trading activities remained quiet for the whole day because
\nmost investors were reluctant to establish new positions,\" Vonny
\nJuwono, an institutional sales broker with Trimegah
\nSecurindolestari, said.<\/p>\n
Profit taking on certain blue chip stocks also weighed down
\nmarket sentiment in the country's ravaged bourse, she added.<\/p>\n
The head of sales at Bahana Securities, Andre Cita, said that
\nlingering worries over social and security problems following
\ndeadly communal clashes in Ambon, Maluku, had discouraged foreign
\ninvestors from entering the Indonesian market.<\/p>\n
\"Foreign investors view Indonesia as less competitive than any
\nof the neighboring countries right now,\" he said, pointing out
\nthat groundless rumors of social unrest spreading to major cities
\nacross the country had kept market sentiment bearish.<\/p>\n
Trimegah's Vonny said that the drastic fall of the daily
\naverage trading turnover to only Rp 100 billion on Tuesday from
\nan average of Rp 400 billion several months ago indicated the
\nloss of confidence by foreign investors in the country's stock
\nmarket.<\/p>\n
\"And we still do not know if the country's crisis has bottomed
\nout,\" she added. (aly)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/rupiah-gains-ground-as-stock-prices-fall-further-1447893297",
"image": ""
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