Rupiah seen to slightly strengthen<\/p>\n
Dadan Wijaksana, The Jakarta Post, Jakarta<\/p>\n
The continued upward movement of regional currencies against
\nthe U.S. dollar, coupled with some domestic good news, would
\ndrive the rupiah slightly stronger this week, although the
\nmovement would be limited to a narrow range, an analyst said.<\/p>\n
\"There are signs indicating that the rupiah is likely to
\nstrengthen,\" Pardi Kendy told The Jakarta Post over the weekend.<\/p>\n
Pardi, who is also Bank Buana's Director, said he based his
\nassumption on the impact of last week's move by the U.S. Federal
\nReserve to cut its benchmark interest rate, which renewed
\nconcerns on the outlook for the U.S. economy. The Fed cut the
\nrate by half a point to 1.25 percent.<\/p>\n
\"The Fed's cut drove most of the regional currencies up
\nagainst the dollar, and the rupiah followed suit. I think this
\nweek the trend will be the same,\" he said.<\/p>\n
The local currency ended the week at Rp 9,195 against the
\ndollar, up slightly from the previous week's closing of Rp 9,225
\nwith the rise attributed by analysts to the Fed's rate cut.<\/p>\n
Aside from external factors, the rupiah is expected also to be
\nsupported by several good news domestically, including the
\nbreakthrough in the Bali bombing investigation.<\/p>\n
The police have said that a native Indonesian had admitted
\ninvolvement in the deadly Bali bombing, which killed close to 200
\npeople, mostly foreign tourists, and left hundreds of others
\ninjured.<\/p>\n
According to a local dealer, the announcement would send
\npositive signals to the market that the government was serious in
\ndealing with terrorists.<\/p>\n
\"This is definitely good news for the rupiah,\" he told the
\nPost.<\/p>\n
Other news that will potentially ignite the local unit was the
\nprogress of the sale of a 42 percent stake in state-owned
\ninternational call operator Indosat and the divestment of Bank
\nNiaga, he said.<\/p>\n
While the Indosat sale had entered the due diligence process,
\nthe Indonesian Bank Restructuring Agency (IBRA) signed Friday the
\nagreement with Malaysia's Commerce Assets Holding Bhd for the
\nsale of a 51 percent stake in Bank Niaga.<\/p>\n
For Indosat, five bidders have been declared eligible to join
\nthe next stage of the bidding process as the government is hoping
\nto raise between Rp 4 trillion to Rp 5 trillion from the sale.<\/p>\n
Meanwhile in the stock market, more news on the privatization
\nand divestment program could help the Composite Index rebound a
\nbit from a 1.5 percent decline last week.<\/p>\n
The index closed at 365.70, or 5.432 points lower than 371.14
\nthe week before, mostly due to regional factors.<\/p>\n
Heavy selling of select blue chips led to stock falls in many
\nregional markets, following Wall Street's decline overnight.<\/p>\n
\"The market will react positively this week on news of
\neconomic reform agenda, including Indosat,\" a dealer said, adding
\nthat Jakarta shares would no longer follow the regional trend
\nthis week because they were already undervalued.<\/p>\n
Daily volume last week averaged 469.6 million shares worth Rp
\n346.4 billion (US$37.6 million) compared with 439.18 million
\nshares worth Rp 329.28 billion the previous week.<\/p>",
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"sponsor_url": "https:\/\/okusiassociates.com"
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