Rupiah stable as stocks fall below 500-point level<\/p>\n
JAKARTA (JP): The rupiah stabilized against the American
\ngreenback as the central bank intervened in the market while the
\nstock market bore the brunt of weakening regional markets,
\ndealers and brokers said.<\/p>\n
The rupiah closed firmer against the dollar yesterday at
\n3,560\/90 compared to the opening of 3,610\/30 in the morning
\nsession after it reached its lowest level of 3,680 in midday
\ntrading when Bank Indonesia, the central bank, stepped in with a
\nsmall amount of dollars, foreign exchange dealers said.<\/p>\n
"But Bank Indonesia sold only a small amount of dollars in the
\nmarket to keep the rupiah from exceeding the 3,700 level," a
\nlocal bank chief dealer said.<\/p>\n
He said that persistent demand by some local companies to
\npurchase dollars weakened the rupiah yesterday.<\/p>\n
"But trading activity was relatively thin," a dealer said.<\/p>\n
Dealers said the market was now waiting for the announcement
\nof the much talked-about financial package from the International
\nMonetary Fund (IMF) to improve Indonesia's economy in the face of
\nthe currency crisis.<\/p>\n
Currency dealers said the relaunch of money market securities
\n(SBPU) did not help the rupiah strengthen much against the dollar
\nas the instrument was provided only to a limited number of banks.<\/p>\n
The central bank reopened its SBPUs on Monday to inject more
\ncash into the country's ailing economy.<\/p>\n
As the rupiah stabilized, share prices on the Jakarta Stock
\nExchange (JSX) declined sharply with the main price gauge
\nplunging below 500 points on regional market losses, brokers
\nsaid.<\/p>\n
Sales director of Asian Development Securities, Naotake Ikeda,
\nsaid selling pressure on the JSX was quite strong due to general
\nbearishness across the region and the free fall of the Hong Kong
\nstock market.<\/p>\n
"The fall of regional share prices coupled with uncertainty on
\nthe financial assistance package from the IMF are the key factors
\nbehind the selling sentiment by most investors," Ikeda told The
\nJakarta Post.<\/p>\n
The composite index closed 2.2 percent, or 11.09 points, lower
\nto 494.13 yesterday with a total 658 million shares changing
\nhands in the regular market valued at Rp 479 billion (US$136.85
\nmillion).<\/p>\n
"As stocks in Hong Kong tumbled by more than 10 percent,
\ninvestors in Jakarta stayed away from the market," vice president
\nof Mashil Jaya securities Tjandra Kartika told The Jakarta Post
\nyesterday.<\/p>\n
"I think the downward trend is not only for Jakarta but for
\nthe whole region," he said.<\/p>\n
Stockbrokers said most investors tracked sidelines as there
\nwas no fresh positive incentives in the market.<\/p>\n
"Given the weakening regional markets, most investors have
\nwithdrawn from the market," Ikeda said.<\/p>\n
However, a stockbroker with a joint-venture brokerage firm
\nsaid the result of negotiations between the IMF and the
\ngovernment could bolster sentiment as most investors had adopted
\na wait-and-see attitude.<\/p>\n
"But if the announcement is delayed, the market may be
\ndisappointed," Ikeda said.<\/p>\n
Stockbrokers and analysts said that the market expected the
\nfinancial assistance package from the IMF would help stabilize
\nthe rupiah.<\/p>\n
"Most investors are waiting for the announcement of the
\npackage ... and if there is any effect, it will be in the long
\nterm," Tjandra said.<\/p>\n
"But for the time being, the market will continue to stay like
\nthis until some time next month," he said. (aly)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/rupiah-stable-as-stocks-fall-below-500-point-level-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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