All quiet on financial front ahead of Xmas

JAKARTA (JP): The rupiah kept on a slippery path to close at 7,825 against the U.S. dollar in quiet trading on Wednesday and stock prices dipped in tandem by 1.4 percent.

Currency dealers said trading on the rupiah was virtually nonexistent, but the local unit veered perilously close to the 8,000 market when several state banks entered the market looking for dollars.

"Unlike in previous days, state banks today purchased the dollar, probably to finance imports of basic commodities ahead of festivities," a chief dealer with a joint venture bank said.

In buying the dollar, dealers said, state banks could act on behalf of government agencies which import basic commodities for Christmas and the Muslim Idul Fitri celebration in January.

The rupiah managed to recover to close at 7,825 after several offshore investment houses sold dollars for the rupiah when the local unit was offered at 7,975.

"The offshore fund managers tried to cash in their profits," the chief dealer.

Dealers said that offshore investment houses bought the rupiah when it was still at 7,400 against the dollar last week.

The rupiah has hovered around the 7,500 level to the dollar in the past four weeks despite unresolved economic and political crises hampering the country.

As Christmas and the year-end holiday are imminent, dealers said, the rupiah was expected to be traded in a narrow range of between 7,500 and 8,000 in coming days.

Reflecting the rupiah's fate, share prices on the local market slid down further on Wednesday due to lack of the fresh leads in the local market ahead of Christmas and year-end holiday.

The Jakarta Stock Exchange (JSX) Composite Index fell 1.4 percent (5.94 points) to close at 400.51, on total turnover of 153.1 million shares changing hands valued at Rp 170.39 billion.

Losers led gainers by 65 to 11 with 85 stocks unchanged.

Stockbrokers said trading activities had been slow, with almost half of the traders absent.

Vonny Juwono, an institutional sales broker with Trimegah Securindolestari, said most offshore fund managers had left the local battered market for the Christmas and year-end holidays.

A stock analyst at BNI Securities, Fitri Muniarti, added: "Foreign investors are out of the equation now."

Trimegah's Vonny said particular domestic investors were seen placing buying orders on second and third line stocks which were rarely traded in the past few weeks. (aly)