BI governor says rupiah will continue to strengthen
BI governor says rupiah will continue to strengthen
JAKARTA (JP): Bank Indonesia Governor Sjahril Sabirin
expressed optimism on Friday that the rupiah would continue to
strengthen amid the improving political situation and growing
confidence in the economy.
"The possibility for the rupiah to strengthen is still open,"
Sjahril said.
The rupiah closed higher at Rp 8,860 late on Friday compared
to Rp 8,925 on Thursday.
Sjahril made the comment after the local currency fell to Rp
9,190 late on Wednesday, which traders said was attributed to
corporate dollar demand for the repayment of debts.
The rupiah has appreciated by about 30 percent since the
election of President Megawati Soekarnoputri late last month.
Sjahril said that the central bank intervened in the money
markets by selling dollars last Wednesday when the rupiah fell
below the psychological level of Rp 9,000 to the U.S. dollar, but
he refused to reveal the amount spent for the intervention.
He added that Bank Indonesia would continue to "take measures"
to help ensure a stable exchange rate of the rupiah to the U.S.
dollar.
Asked to comment on earlier statements made by Coordinating
Minister for the Economy Dorodjatun Kuntjoro-Jakti that the
government wanted to see the rupiah fluctuate within a 10 percent
range, he said that was only possible if the current political
situation could be maintained.
"If the political situation stabilizes and the exchange rate
reaches a new equilibrium, the target is attainable," he
said.
The Japanese yen's jump to a three-month high helped snap the
rest of the region's currencies from their recent lethargy.
At 0844 GMT (3.44 p.m. Jakarta time), the dollar was quoted at
118.60 yen, below 119.41 yen late Thursday in New York and
119.90 yen late Thursday in Tokyo, according to Dow Jones
Newswires.
The Singapore dollar leapt to its strongest level since Feb.
20, as stop-loss selling in the U.S. currency was triggered when
it broke the critical S$1.7400 level.
The U.S. dollar had skidded to as low as S$1.7370 earlier,
compared with S$1.7471 late Thursday. Late Friday, the U.S.
dollar was around S$1.7374.
The Monetary Authority of Singapore appeared to have tolerated
the Singapore dollar's sharp gains, since they were in line with
the appreciation in the currencies of its major trading partners,
particularly the yen, said Koh at UOB.
The MAS guides the Singapore dollar within a trading band
against a basket of currencies of the country's major trading
partners.
How much higher the Singapore dollar could go would depend "on
how far Japanese officials would allow the yen to strengthen,"
said Koh.
For now, Koh expects the Singapore dollar to trade between
S$1.7350 and S$1.7450, with a bias toward the stronger end of the
range.
The Thai baht hit fresh five-month highs as it rode on the
coattails of gains in the yen and the Singapore dollar. Remarks
by Thai central bank Governor Pridiyathorn Devakula that the
authority is "monitoring the baht" to curb excess volatility
failed to deter dollar bears.
The dollar briefly sank below 44 baht to hit an intraday low
of 43.980 baht on dollar sales by onshore and offshore banks.
Dollar short-covering, however, pushed the dollar back up to
44.025 baht at 0919 GMT (4.19 p.m. Jakarta time), compared with
44.265 baht late Thursday, dealers said.
In Seoul, the dollar finished at 1,278 won, down from
Thursday's close of 1,283.7 won. Stop-loss dollar sales were
executed when the U.S. currency floundered to 1,281.50 won,
exerting further pressure on the dollar, dealers said.
Against the New Taiwan dollar, the U.S. dollar closed at
NT$34.554, lower than NT$34.582 Thursday.
On the Philippine Dealing System, the dollar closed at a week
low of 50.935 pesos, down from 51.215 pesos Thursday. (03)