Rupiah strengthens to 15,000 to the dollar<\/p>\n
JAKARTA (JP): The rupiah improved to Rp 15,000 against the
\nU.S. dollar yesterday following a rally by the Japanese yen and
\nintervention by Bank Indonesia (BI) to reduce domestic demand for
\nthe dollar, currency dealers said.<\/p>\n
Stock prices on the Jakarta Stock Exchange (JSX) followed in
\nthe rupiah's wake and gained almost 5 percent, with the composite
\nindex closing up 20.651 points on 440.093.<\/p>\n
Currency dealers said the news that Japan's Exim Bank would
\nprovide Indonesia with a US$1 billion trade financing facility
\nhad also boosted the rupiah.<\/p>\n
They added that regional factors, especially the strengthening
\nof the yen to 136 against the dollar, had also contributed to the
\nstrengthening of the rupiah.<\/p>\n
\"We cannot deny the fact that the yen determines the ups and
\ndowns of all currencies in the region, including the rupiah,\" a
\ndealer with a local foreign exchange bank said.<\/p>\n
\"Yesterday (Wednesday) the rupiah did not track the yen
\nbecause offshore operators played on the rupiah, knowing that
\ndomestic dollar demand was very large. Today (yesterday), they
\ntook their profits,\" he added.<\/p>\n
Domestic demand for the dollar increased following BI's
\ninstruction to commercial banks to settle their foreign exchange
\ndebts and trade finance arrears by June 30.<\/p>\n
BI director Miranda S. Goeltom said Wednesday that commercial
\nbanks' trade-related foreign debt arrears totaled US$820 million
\nand their non-trade-related debts stood at $200 million.<\/p>\n
To reduce dollar demand, BI governor Sjahril Sabirin said the
\ncentral bank was providing all foreign exchange needed by
\ncommercial banks to pay their foreign debt arrears.<\/p>\n
\"We will provide the necessary foreign exchange to banks which
\nhave to settle their trade finance obligations,\" Sjahril told
\njournalists after signing a $1 billion trade loan agreement with
\nJapan's Exim Bank.<\/p>\n
As a result of BI's intervention the rupiah rose to a day high
\nof Rp 14,100 from a low of 16,200 in the morning, before closing
\nat Rp 15,000.<\/p>\n
The strengthening yen and the rupiah's reaction encouraged
\nInternational Monetary Fund (IMF) Asia Pacific director Hubert
\nNeiss to express optimism over the prospects of reaching the
\ntarget rate of Rp 6,000 to the dollar set by the IMF and the
\ngovernment earlier this year.<\/p>\n
Earlier this week, Neiss, who is heading an IMF review team to
\nset new policy and budget outlines with the government, said the
\nRp 6,000 target exchange rate was unrealistic.<\/p>\n
Nevertheless, Neiss said: \"We cannot make any precise
\nforecast. The exchange rate is what the market determines it to
\nbe.\"<\/p>\n
The strengthening rupiah also gave a much needed boost to the
\nstock market, stockbrokers said.<\/p>\n
They said short-term foreign investors started buying certain
\nvalued stocks, especially export earners and dual-listed
\ncompanies.<\/p>\n
The head of research at Usaha Bersama Sekuritas, Baradita
\nKatopo, said dollar-valued companies would continue to make gains
\nin the future.<\/p>\n
\"Today all companies with dollar revenues like Indah Kiat
\ngained ground, reflecting their true strength. Only Aneka Tambang
\nshares remained flat. But I think it's only a matter of time
\nbefore they too rise to reflect the companies strength,\" he said.<\/p>\n
Baradita, however, warned: \"The increase might not last for
\nlong because there are always profit takers.\"<\/p>\n
Both pulp and paper firm PT Indah Kiat and state-controlled
\ngold and nickel mining company PT Aneka Tambang export most of
\ntheir produce.<\/p>\n
Dual-listed firms like telecommunications giants PT Telkom and
\nPT Indosat, and tin mining company PT Tambang Timah also made
\nsome gains.<\/p>\n
Telkom rose Rp 200 to Rp 1,075, while Indosat jumped Rp 575 to
\nRp 16,600 rupiah. (rei\/rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/rupiah-strengthens-to-15000-to-the-dollar-1447893297",
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