Share prices fall along with rupiah<\/p>\n
JAKARTA (JP): The rupiah continued its record plunge, almost
\nbottoming out at 15,000 to the U.S. dollar yesterday, and share
\nprices on the Jakarta Stock Exchange (JSX) fell 4.8 percent on
\npersistent negative sentiment.<\/p>\n
Currency dealers and stockbrokers said market sentiment
\nremained bleak yesterday on a combination of rising fears over
\nthe private sector external debt and heightened political
\nsensitivity over the presidency and vice presidency.<\/p>\n
\"The market remains negative, even after the government issued
\nmore rulings to implement economic reforms. What matters now, I
\nthink, is how the country resolves its mounting corporate debt,\"
\na local private bank dealer said.<\/p>\n
\"Besides, more and more people demand political reforms and
\nopenly express their disagreement with Soeharto's decision to run
\nin the (March) presidential election for his seventh five-year
\nterm in office,\" he said.<\/p>\n
About 100 youths from various groups picketed at the House of
\nRepresentatives' building yesterday, demanding that Soeharto step
\ndown and protesting the International Monetary Fund's involvement
\nin Indonesia.<\/p>\n
Dealers said the spot rupiah touched an all-time low of
\n14,500\/15,000 to the dollar in Jakarta during lunch break before
\nrecovering in the afternoon due to intervention by Bank
\nIndonesia, the central bank.<\/p>\n
The rupiah fell even further in Singapore, down to an abysmal
\n17,000.<\/p>\n
The rupiah closed at 11,800\/12,300 in Jakarta against an
\nopening of 10,500\/11,800.<\/p>\n
At its current level, the rupiah has lost about 60 percent of
\nits value against the dollar since the beginning of this year and
\n80 percent since early July when the rupiah was at 2,450.<\/p>\n
Dealers said the rupiah managed to recover yesterday afternoon
\ndue to the central bank's limited intervention in the foreign
\nexchange market.<\/p>\n
\"The central bank was seen intervening in the market
\nrepeatedly through several state banks at different levels,\" the
\nchief dealer said.<\/p>\n
The dealer said the central bank was seen selling a limited
\namount of dollars when the rupiah was at 13,400, 12,500 and
\n12,400.<\/p>\n
Some dealers suggested that the central bank impose a limit on
\nforeign exchange transactions in the next few days to prevent the
\nrupiah from descending further.<\/p>\n
\"The government can, for example, record people who make a lot
\nof dollar purchases and their purpose for purchasing that
\namount,\" another local bank dealer said.<\/p>\n
But the most important thing, they said, was for the
\ngovernment to help resolve the mounting private sector debt.
\nOtherwise, the rupiah would continue to tumble.<\/p>\n
As the rupiah crashed, stock prices also declined with the JSX
\nmain index closing 4.8 percent lower on investors' panic selling
\ntriggered by the sharp plunge of the rupiah against the dollar,
\nbrokers said.<\/p>\n
The JSX composite index ended 22.47 points lower to 443.52
\nyesterday with about 536.7 million shares changing hands valued
\nat Rp 810.96 billion ($67.58 million).<\/p>\n
An analyst with a joint-venture securities firm who asked for
\nanonymity said the persistent fall of the rupiah forced most
\ncompanies to the brink of collapse because they had difficulties
\nin covering their dollar obligations.<\/p>\n
\"Most companies have technically gone bankrupt at the current
\nlevel of the rupiah. We're just waiting for the announcement of
\ntheir collapse in coming months,\" the analyst said. (aly)<\/p>\n
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