Dollar dumping boosts rupiah further

Dollar dumping boosts rupiah further

JAKARTA (JP): The rupiah rallied for a second day in a row, on
the back of euphoria that swept the market, following the
election of Megawati Soekarnoputri as the country's fifth
president.

Bank Buana director Pardi Kendi said on Tuesday that market
players had continued to dump the U.S. dollar on optimism
political stability would return to this country.

The rupiah breached the 10,000 level in Tuesday's trading, as
it closed at 9,850 to the dollar, as against 10,230 on Monday.

But Pardi said the rupiah's upsurge had weakened, indicating
that room for more gains had narrowed.

"We will see the rupiah stabilizing a bit in the next one or
two days," he told The Jakarta Post

According to him, the market is in a honeymoon period with the
new government, similar to that which followed the 1999 election
of Abdurrahman Wahid to the presidency.

"But this honeymoon period will be far shorter, given the many
problems that await Megawati," he added.

Meanwhile, Dow Jones reported the Singapore dollar was also
helped by improved sentiment toward the rupiah, as well as market
expectations of an off-budget economic stimulus package the
government was scheduled to unveil on Wednesday, dealers said.

The U.S. dollar was quoted at S$1.8191 in late Asian trading,
down from S$1.8240 late on Monday.

There is a chance the Singapore currency could strengthen
further to between S$1.8100 and S$1.8150 against the U.S. dollar
if the yen were to rise unexpectedly, or if the rupiah "rallied
massively," according to UBS Warburg.

The Thai baht continued to rebound from a 40-month low touched
early on Monday.

Foreign exchange traders said they suspected official
intervention because institutions that usually act on behalf of
the central bank were active in the market. However, the Bank of
Thailand denied it had intervened.

In late Asian trading the dollar was quoted at 45.170 baht,
down from 45.746 baht late on Monday.

The New Taiwan dollar finished stronger for the fifth
consecutive session on continued U.S. dollar-selling by exporters
and offshore players.

The U.S. dollar closed at NT$34.878, compared with NT$34.893
on Monday.

Analysts said the New Taiwan dollar's rise was expected to be
short-lived because it would take more substantive factors, such
as signs of an economic recovery, to sustain a rise in the
currency.

The South Korean won edged higher as the local stock market
recovered some of Monday's losses.

The dollar finished at 1,308.5 won, slightly down from
Monday's close of 1,309.3 won.

The Philippine peso was pressured by lingering domestic
economic and security concerns, along with the weakness in the
yen, traders said.

The dollar closed at 53.550 pesos on the Philippine Dealing
System, up from 53.400 pesos on Monday. (bkm)