Rupiah to remain firm this week<\/p>\n
Dadan Wijaksana, The Jakarta Post, Jakarta<\/p>\n
The impressive showing of the rupiah against the dollar would
\nlikely continue this week amid continued positive sentiment in
\nthe market, an analyst said, predicting it could even break
\nthrough the Rp 8,500 level.<\/p>\n
The rupiah closed at Rp 8,700 against the American greenback
\nlast week, the strongest performance since September last year,
\nas against Rp 8,950 in the previous week's closing.<\/p>\n
That came as a result of the market participants cutting their
\nlong-dollar positions and local exporters unloading part of their
\ndollar earnings.<\/p>\n
Those long on dollars sold at a loss and local exporters
\nexchanged dollars into rupiah for fear that the U.S. currency
\nwould continue to decline.<\/p>\n
"I think the rupiah will continue to strengthen next week.
\nAlthough news of the Bank Niaga sale progress is not so good, the
\nmarket is still keen to sell dollars," a noted analyst at an
\nEuropean bank told The Jakarta Post over the weekend.<\/p>\n
The government is set to cancel the planned sale of Niaga
\nthrough strategic sales, as the prices offered by the two
\nremaining consortia, each led by ANZ Banking Groups Ltd. and
\nMalaysia-based Commerce Holding-Assets Bhd., are considered too
\nlow.<\/p>\n
The powerful Financial Sector Policy Committee, which consists
\nof all the ministers in charge of economic affairs, is scheduled
\nto announce its final decision on the medium-sized bank today
\n(Monday).<\/p>\n
Analysts said the government is likely to sell the 51 percent
\nstake of the bank to the capital market through a private
\nplacement.<\/p>\n
FSPC oversees the sale of assets and debts restructuring under
\nthe Indonesian Bank Restructuring Agency (IBRA) worth more than
\nRp 1 trillion.<\/p>\n
The cancellation risks criticism from the International
\nMonetary Fund (IMF), which has recommended the sale of the bank.<\/p>\n
Despite the risk, the strong optimism over the country's
\neconomy and bearish sentiments towards the dollar would continue
\nto underpin the rupiah's strength, the analyst added.<\/p>\n
Nevertheless, he warned of a sharp correction of the rupiah
\nshould the government fail to use the current good momentum to
\nimprove the country's economic fundamentals.<\/p>\n
"So far, the real sector has not recovered yet and the
\napproved foreign direct investment in the country dropped 88
\npercent during the first quarter. These have to be improved or
\nelse the rupiah's movement would not be maintained," he said.<\/p>\n
Meanwhile in the stock market, the Composite Index is expected
\nto maintain its upward trend this week, in line with the rupiah's
\nstrong performance, a stock dealer with a local brokerage said.<\/p>\n
"Thanks to the rupiah's movement against the dollar, the index
\nwill retain its momentum next week," she told the post.<\/p>\n
After a sharp decline two weeks ago, the index recovered last
\nweek to close at 530.8 points, or close to five percent higher
\nthan the week before.<\/p>\n
Daily volume averaged 861 million shares valued at Rp 534.3
\nbillion compared to the previous week's 741.6 million shares
\nvalued at Rp 654.4 billion.<\/p>\n
State telecommunication firm Telkom gained Rp 225 rupiah over
\nthe week to close at Rp 4,075 while state international call
\noperator Indosat closed Rp 150 higher at Rp 11,750.<\/p>\n
Cigarette maker Sampoerna was up Rp 400 over the week at Rp
\n4,575 while rival Gudang Garam rose Rp 700 rupiah to Rp 10,850.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/rupiah-to-remain-firm-this-week-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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