Rupiah slides 7% to close at 8,600 against the dollar<\/p>\n
JAKARTA (JP): The financial market sank again on Wednesday,
\nwith the rupiah sliding 7 percent to close at 8,600 and stock
\nprices falling nearly 4 percent.<\/p>\n
Currency dealers said that Indonesia's beleaguered rupiah took
\nanother fresh knock on Wednesday as offshore speculators dumped
\nthe currency on fears of the country's deteriorating political
\nand economic conditions.<\/p>\n
The rupiah, which closed at 8,050 on Tuesday and opened at
\n8,200 on Wednesday morning, crashed through the 8,500 level
\nagainst the American dollar in late trading urged on by a lack of
\npositive leads in the market and aggressive attacks by offshore
\nplayers.<\/p>\n
\"It was just another sad day for the fate of the rupiah ...
\noffshore speculators are returning to attack the rupiah again,\" a
\ndealer at a local bank said.<\/p>\n
\"The rupiah is at a very critical level now, but I think the
\ngovernment will try to defend it,\" the dealer added.<\/p>\n
Dealers said that several state banks, which in the past few
\ndays were buying dollars to settle their overseas obligations,
\nstepped in to prop up the currency by unloading their dollar
\nholdings.<\/p>\n
\"But this unfortunately failed to shore up the rupiah because
\nthe volume of the intervention was much smaller than the dollar
\nbids by offshore speculators,\" the dealer said.<\/p>\n
The governor of Bank Indonesia, Sjahril Sabirin, said on
\nWednesday that the government would continue to intervene in the
\nmarket to keep the rupiah from sliding below the 8,000 level
\nagainst the greenback.<\/p>\n
\"We will maintain a day to day control by doing what we have
\nbeen doing all this time,\" he told reporters after the House of
\nRepresentatives' plenary session on a central bank draft law.<\/p>\n
However, many analysts doubted the effectiveness of the
\ncentral bank's intervention, saying the uncertainty in the
\ncountry's political and economic conditions would further
\nundermine the Indonesian currency.<\/p>\n
\"The rupiah will possibly hit the 9,000 level if this fresh
\nattack continues,\" another dealer said.<\/p>\n
Like the rupiah, share prices on the stock market also fell
\nsharply, taking a 3.9 percent plunge on Wednesday, with the
\nJakarta Stock Exchange (JSX) main price index falling 17.08
\npoints to close at 419.10, with 321 million shares worth a total
\nof Rp 650.28 billion changing hands.<\/p>\n
Losers outdistanced gainers 77 to 21 with 81 stocks unchanged.<\/p>\n
Stock brokers said that profit taking on blue chip stocks,
\nwhich had rallied last week, combined with a generally sluggish
\nsentiment in regional equity markets to help drag down local
\nshare prices.<\/p>\n
\"We can say that profit taking and the general fall in other
\nequity markets was the reason behind the fall of our market,\"
\nVonny Juwono, an institutional sales broker with Trimegah
\nSecurindolestari, said.<\/p>\n
A sales manager with Mashill Jaya Securities, Antonio
\nYongnata, said that foreign investors would not be tempted to
\nstay in the battered local market because at the moment they had
\nnot found any incentives to invest in the local bourse.<\/p>\n
\"Foreign investors prefer to stay away from the market because
\nthe country is still struggling with its political and economic
\ncrises,\" he said.<\/p>\n
Trimegah's Vonny said that foreign brokerage firms such as ABN
\nAmro, Merrill Lynch Indonesia and Jardine Fleming Nusantara,
\nwhich invested massive funds in most blue chip stocks last week,
\ncontinued to discard their portfolio holdings.<\/p>\n
The country's financial market will be closed from Jan. 16 to
\nJan. 23 to celebrate the Muslim Idul Fitri holiday. Trading
\nactivities will resume on Jan. 25. (das\/aly)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/rupiah-slides-7-to-close-at-8600-against-the-dollar-1447893297",
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"sponsor": "Okusi Associates",
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