Rupiah sinks to 14,700 as stocks lose grounds<\/p>\n
JAKARTA (JP): The rupiah sank 5 percent yesterday to close at
\n14,700 against the U.S. dollar as the Japanese yen touched its
\nlowest level since August 1990.<\/p>\n
The stock market, battered by sinking turnover, slid 0.46
\npercent despite gains in dollar-valued stocks which were buoyant
\non the rupiah's fall.<\/p>\n
Stock analysts said that prevailing uncertainties about
\ndomestic political and economic stability were also dragging the
\nmarket down.<\/p>\n
\"It is so difficult to expect the market to recover in the
\nnear future as everyone is in crisis now,\" Harita Kencana
\nSecurities president Christina Lim said.<\/p>\n
She added the market could well sag further because confidence
\nwas absent in a time of crisis and the market still feared that
\nmass rioting could recur at any time in the future.<\/p>\n
\"The market could go down further as there is nothing to look
\nforward to in the near future. People are still scared to invest
\nhere. Even today, we heard people were rioting somewhere,\" she
\nsaid.<\/p>\n
It was reported that hundreds of people continued rioting in
\nthe town of Tegal in Central Java yesterday, damaging several
\nhomes, offices and shops.<\/p>\n
Currency dealers said the combination of domestic political
\nand economic uncertainty and a weak yen hit the rupiah, which was
\nalready suffering from market illiquidity.<\/p>\n
\"The yen which fell below 146 to the dollar today (yesterday)
\nwas the main culprit behind the fall of the rupiah,\" a dealer
\nwith a local private foreign bank said.<\/p>\n
The rupiah hit 15,000 yesterday afternoon before closing at
\n14,700. It had closed at 14,000 on Friday.<\/p>\n
The dealer added that demand for dollars remained high,
\nespecially from local commercial banks as Bank Indonesia extended
\nthe deadline for them to settle outstanding arrears in their
\ninterbank and trade finance debt to June 30.<\/p>\n
\"So, we can expect that the rupiah will not recover until June
\n30 as demand for dollars will remain,\" he said.<\/p>\n
He added the sharp fall in the rupiah was aggravated by the
\nvery thin trades, with the largest trade amounting to only about
\none million dollars.<\/p>\n
In the money market, dealers said the central bank set rupiah
\ninterbank interest rates at 51 percent per annum for this week,
\ndown from 53 percent last week.<\/p>\n
\"We can expect that the central bank is actually moving toward
\nlowering interest rates. We should welcome this move. But the
\nproblem is that the IMF might not be happy with that kind of
\nmove,\" Manaek Robert Toruan, the head of Bank Niaga's fixed
\nincome desk, said.<\/p>\n
The International Monetary Fund has said that the government
\nshould maintain tight money policy to prevent inflation from
\nsoaring further.<\/p>\n
On the stock market, share prices on the Jakarta Stock
\nExchange (JSX) lost 0.4 percent, with the JSX Composit Index
\nclosing 1.871 points lower at 406.501.<\/p>\n
Total turnover on the JSX was a meager US$18 million yesterday
\nafter averaging only $17 million a day last week.<\/p>\n
Stockbrokers said a heavier fall in the index was prevented by
\ngains in stocks with dollar valuations, like telecommunications
\nstocks Telkom and Indosat and tin miner Tambang Timah, as the
\nrupiah sagged to near 15,000.<\/p>\n
\"If you take Telkom and Indosat out of the market, the market
\nwas actually a lot more depressed than you might think,\" an
\nanalyst with a joint venture securities house said. (rid)<\/p>",
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