Indonesia Rupiah ends op on reported IBRA dollar selling
Indonesia Rupiah ends op on reported IBRA dollar selling
JAKARTA (Dow Jones) : The rupiah ended slightly higher Friday
as the government's Indonesian Bank Restructuring Agency, or
IBRA, reportedly sold dollars to help the local unit.
The dollar was quoted between Rp9,410 and Rp9,430 in late
Asian trade Friday, a little lower than Rp9,425 to Rp9,470 late
Thursday.
The dollar fell as Holdiko - the IBRA unit charged with
managing assets formerly belonging to the Salim Group - sold
US$50 million, traders said.
IBRA sold a number of Salim assets this year and last year to
foreign investors, but didn't immediately transfer the proceeds
into rupiah.
Players that were long dollars cut those positions on the IBRA
selling and feared central bank intervention in thin pre-weekend
trade. In the event, the central bank didn't sell dollars in the
market Friday, traders said.
But the market is likely to remain bullish toward the dollar
next week, they added. High dollar demand from local corporates
for foreign debt repayment and to fund imports supported the U.S.
currency at its day low of Rp9,350.
Next week, the dollar is likely to move in a Rp9,350-Rp9,650
range.
An escalation of tensions between Afghanistan and the U.S.,
however, could break the pair out of this range, traders said.
Traders remain unsure how the rupiah would move on a U.S.
strike on Osama bin Laden's bases in Afghanistan in retaliation
for last week's terrorist attacks.
Indonesia has the world's largest number of Muslims and some
militant groups have said they will attack U.S. interests in the
country if the U.S. hits Afghanistan. Such actions would push the
dollar higher.
However, these elements represent a minority in Indonesia,
with President Megawati Soekarnoputri reaffirming in her meeting
with President George Bush this week in Washington that Jakarta
stands ready to fight terrorism.
Events in Pakistan failed to move the rupiah Friday, as the
market focused on debt repayment issues and IBRA dollar selling.
In Islamabad, Afghanistan's envoy to Pakistan said Friday his
country wouldn't hand over Osama bin Laden to the U.S. without
evidence of his involvement in the terrorist attacks.
Indonesia's overnight rate stood at a lower-than-normal 15.25%
Friday, unchanged from Thursday. The rate fell this week after
the central bank threw out about half the bids for its weekly
one-month note auction, leaving the interbank market awash with
liquidity.
Although this seems to point to lower rates, analysts said the
central bank is unlikely to push yields lower in coming weeks
amid fears the rupiah could move lower on debt repayment
outflows. A weak rupiah this year has pushed up the cost of
imported goods, making inflation a constant worry.