Rupiah rebounds on foreign dollar selling<\/p>\n
JAKARTA (JP): The rupiah recovered against the U.S. dollar
\nyesterday on regional positive sentiment and Bank Indonesia's
\nmild intervention as the stock market ended slightly lower in
\nlackluster trading, dealers and brokers said.<\/p>\n
Currency dealers said improving regional currencies and Bank
\nIndonesia's intervention in afternoon trading helped the rupiah
\nrecover to 3,270 against the greenback from yesterday's low of
\n3,345 in midday trading.<\/p>\n
The spot rupiah closed at 3,275\/3,300, compared with the
\nopening of 3,250\/3,300.<\/p>\n
\"Bank Indonesia was seen in the market when the rupiah was at
\n3,305 yesterday,\" a local bank chief dealer said.<\/p>\n
The dealer said the amount of dollars sold by the central bank
\nwas limited, but enough to shore up the rupiah as trading
\nactivities were meager.<\/p>\n
Foreign exchange market analyst Theo F. Teomion acknowledged
\nthat Bank Indonesia's persistent market intervention had proved
\neffective in preventing the rupiah from falling further.<\/p>\n
But it would not be effective in the long term, he said,
\narguing that the rupiah would eventually weaken when the central
\nbank left the market.<\/p>\n
\"Bank Indonesia's intervention by selling dollars will
\neventually become ineffective in the current situation,\" he said.<\/p>\n
Some dealers said some foreign operators, mainly Japanese,
\nhelped prop up the rupiah yesterday by selling dollars and buying
\nrupiah.<\/p>\n
However, the volume remained small yesterday, with trading
\nmostly coming from state banks and foreign banks, while local
\nprivate banks were rarely involved, they said.<\/p>\n
They said liquidity was sufficient yesterday, although some
\nprivate banks still held onto excess funds to anticipate a
\npossible run by depositors.<\/p>\n
The overnight rupiah fell in a range from 13 percent to 15
\npercent in the afternoon from 35 percent to 40 percent in the
\nmorning.<\/p>\n
Swap rates were also lower in the afternoon, with the tom\/next
\nswap rate at 1 point\/2 points, one-week at 17.5\/22.0, one-month
\nat 50\/55, two at 95\/110, three at 145\/180, six at 230\/300 and
\none-year at 450\/550.<\/p>\n
The strengthening rupiah did not help trading activities on
\nthe Jakarta Stock Exchange (JSX) as the composite index fell 3.84
\npoints to close at 490.98.<\/p>\n
Total turnover was 326.48 million shares worth Rp 353.6
\nbillion (US$108.8 million).<\/p>\n
Some brokers and stock analysts attributed yesterday's fall to
\nincreasing market worries over the tense conflict between
\nPresident Soeharto's second son Bambang Trihatmodjo and half
\nbrother Probosutedjo against Minister of Finance Mar'ie Muhammad
\nover the closure of their banks by the latter.<\/p>\n
Bambang, who owns 25 percent of closed Bank Andromeda, sued
\nMar'ie and Bank Indonesia governor J. Soedradjad Djiwandono
\nyesterday for closing the bank.<\/p>\n
Probosutedjo said he did not rule out bringing the government
\nto court over the closure of his bank, Bank Jakarta, as well.<\/p>\n
\"I think investors are very concerned right now with the
\nliquidation of the 16 banks and the political clout stemming from
\nthe conflict between high-profile businessmen and the finance
\nminister,\" one broker with a joint-venture securities house said.<\/p>\n
However, sales director of BZW Niaga Securities Adnan Tan
\ndisagreed and argued that the index fell yesterday as the market
\nhad discounted the massive financial package sponsored by the
\nInternational Monetary Fund long before it was announced last
\nweek.<\/p>\n
In addition, Tan said, the fall of stock prices on the JSX was
\nnot an isolated case but a global trend.<\/p>\n
\"It's just a global move of funds out of Asia. It's just a
\ndownward trend for all Asian markets. There's nothing wrong with
\nthe government's move to liquidate the banks. The government has
\ndone its best,\" he said. (aly)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/rupiah-rebounds-on-foreign-dollar-selling-1447893297",
"image": ""
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