Euro money hard to find in local market

Euro money hard to find in local market

The Jakarta Post, Jakarta

After a second day as Europe's legal tender, euro banknotes
and coins had yet to gain a foothold in the local market, with
only a few banks and money changers stocking the new currency.

Local banks, Bank Danamon, Bank Niaga, Bank Mandiri and Bank
Negara Indonesia (BNI), said the euro was not available at the
banks and could not say when it would be.

"We don't know from whom we're going to get the euro," BNI
spokesman Ryan Kiryanto told The Jakarta Post on Wednesday.

He said that BNI might make its first contact with the new
currency from travelers carrying euro currencies or from banks in
Europe.

A Bank Danamon official who refused to be named said the bank
had thus far been using the euro only in rates when transferring
money with European banks.

"We don't provide the currency physically," the official said.

The euro made its debut in the international money market in
1999 as a "virtual currency." Its banknotes and coins were
introduced on New Year's Day, marking a landmark move to unite
Europe under one currency.

Thus far it is unclear when the new currency will become
widespread throughout the rest of the world.

Money changers in Jakarta said they too were not euro ready.

Most said that to obtain the currency, they relied on
travelers returning from Europe with the euro banknotes.

Among them is PT Sinar Irawan, which said it had purchased
euro banknotes from an arriving tourist at a rate of Rp 9,200.

Saying that Bank Indonesia might ban the old European
banknotes, some money changers said they would reject accepting
them after January.

But when asked when they expected to start selling the euro,
all said they were still in the dark over its arrival.

Exchanging European banknotes to rupiah and only then
converting them into the euro would cost customers twice the
transaction fees money changers charged.

Elsewhere, foreign banks looked more prepared. HSBC and
Netherlands' ABN-AMRO said euro banknotes had been available at
their banks from New Year's Day.

"We have been preparing for the euro since last August," said
HSBC spokesman Agung Laksamana. He could not say how much in euro
banknotes the bank was holding.

Bank Indonesia Deputy Governor Miranda Goeltom said the
central bank would provide the euro for the local market, but
when was yet not known.

"Demand for the currency in Europe alone exceeds the euro's
capacity," she said in an interview with Metro TV.

Miranda said that although Bank Indonesia planned to sell the
euro currency, banks or money changers were free to seek their
own supply.

According to her, some 90 percent of the country's foreign
currency demand was in U.S. dollars.

Bank Indonesia, she said, would monitor demand for the euro in
the money market before deciding how much it would purchase.

To set the rate for the euro, she said the rupiah must first
be rated against the U.S. dollar, which in turn was rated against
the euro.

At present rates, the euro is worth 0.89 against the U.S
dollar which is worth 10,450 against the rupiah. The euro,
therefore, is worth 9,300 to the rupiah.