Rupiah to remain under pressure<\/p>\n
Dadan Wijaksana, The Jakarta Post, Jakarta<\/p>\n
Following a two percent drop last week, the rupiah's roller-
\ncoaster performance against the U.S. dollar is expected to
\ncontinue this week as the market would remain cautious, awaiting
\nfresh news, currency analysts said.<\/p>\n
DBS Vickers analyst Wiwan Wiradjaja predicted the local unit
\nwould continue to decline, saying the absence of positive market
\nsentiment would put additional pressure on the rupiah, already
\nhit by recent \"unwise\" statements from the monetary authority.<\/p>\n
\"The rupiah will tend to weaken this week, hovering between Rp
\n8,900 to Rp 9,100 while the market applies a wait and see
\napproach,\" Wiwan told The Jakarta Post on Sunday.<\/p>\n
After reaching around Rp 8,400 midweek, the strongest level in
\nnine months, the rupiah fell sharply against the U.S. currency
\npartly because of remarks by Bank Indonesia deputy governor
\nMiranda Goeltom, saying the safe level for the Indonesian unit
\nwas between Rp 8,500 and Rp 9,000.<\/p>\n
The statement prompted a fall in the rupiah over the following
\ndays to over Rp 9,000 per U.S. dollar.<\/p>\n
However, thanks to Bank Indonesia intervention on Friday, the
\nlocal currency edged upwards again to close the week at Rp 8,870,
\na depreciation of almost two percent compared to the previous
\nweek's close of Rp 8,700.<\/p>\n
Wiwan was of the opinion that such statements would have
\nnothing but a negative impact on the rupiah.<\/p>\n
A dealer in a local brokerage concurred, saying that as an
\nofficial of the monetary authority, Miranda should know how
\nsensitive the market would be in responding to such a statement.<\/p>\n
\"Look at the damage it did. The rupiah will now find it
\ndifficult to claw its way up again against the dollar,\" he told
\nthe Post.<\/p>\n
Also hurting the rupiah would be lingering fears of security
\ndisturbances and confusion about the government's Bank Niaga
\ndivestment plan.<\/p>\n
Three bombs exploded in downtown Jakarta early on Sunday,
\ninjuring four people. This could create a perception that the
\ngovernment had difficulty in maintaining security, and would
\neventually affect the rupiah in a negative way, Wiwan said,
\nunless the government responded as quickly as possible.<\/p>\n
As for the Bank Niaga sale, if the government were to cancel
\nit, this would hurt relations with the International Monetary
\nFund, which in turn would affect investor confidence in the
\neconomy, seen as a crucial factor in helping the rupiah.<\/p>\n
Certain top government officials had earlier suggested that
\nthe strategic sale of the Bank Niaga stake be delayed due to the
\nlow levels of the bids submitted.<\/p>\n
Meanwhile, in the Jakarta stock market, the Composite Index
\nwould likely remain flat with a strong tendency to decline due to
\nthe uncertainties surrounding the Bank Niaga sale and the rights
\nissue plan of state-owned telecommunications firm PT Indosat.<\/p>\n
\"The government has to clarify the situation regarding Indosat
\nand Niaga, or else the players will not enter the market,\" a
\nstockbroker with a local bank said.<\/p>\n
Last week, the index fell 3.2 percent to close at 514.09
\npoints, compared to 530 points the week before.<\/p>\n
Shares in state-owned telecommunications firm Telkom dropped
\nby Rp 125 over the week to close at Rp 3,950 per share, while
\nIndosat closed Rp 400 lower over the week at Rp 11,350.<\/p>\n
Cigarette maker Sampoerna lost Rp 225 over the week at Rp
\n4,350 while rival Gudang Garam dropped Rp 150 over the week to Rp
\n10,700.<\/p>\n
Daily volume averaged 481.34 million shares valued at Rp
\n386.44 billion ($43.51 million) compared to the previous week's
\n861 million shares valued at Rp 534.3 billion.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/rupiah-to-remain-under-pressure-1447893297",
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"sponsor": "Okusi Associates",
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