Money changers profit from rupiah nosedive

JAKARTA (JP): Frenzied trading at money changer outlets throughout the city, which were triggered by rumors that President Soeharto was seriously ill, had leveled out yesterday.

Arsil Moein, a director of Ayumas Money Changer on Jl. Raya Kwitang, Central Jakarta, admitted that the rush to buy U.S. dollars started Tuesday when the spot rupiah hit another historic low of Rp 4,600 to the greenback.

He said people swamped money changers Wednesday but this time they resold the dollars they had bought on previous days.

The spot rupiah strengthened to Rp 4,380 against the dollar during trading Wednesday afternoon before closing at Rp 4,410 following reports that the President would attend a regional summit in Malaysia Sunday.

Arsil refused to reveal the total value of transactions registered during the two-day rush, saying: "It's my company's secret."

But he said that most of the customers who flocked to his office, were local traders, whose business transactions were dollar based.

Frans Utama, a customer relations officer for PT Surya Intivaluta Utama, said the same phenomenon took place at his outlet in the Kwitang area.

"We're just a small money changer here... so maybe most of the customers rushed to Ayumas.

"But we don't put a limit on the amount of dollars they want to buy. Even if they just wanted to buy one dollar, we would serve them."

The company's policy is different to the limits applied by major money changers, he said.

Sutyanto, an accounting student, said he bought dollars at Ayumas yesterday to prepare for an emergency situation.

He bought dollars at his friend's suggestion, to anticipate a terrible time when the rupiah plunges further against the dollar, he said.

"If the political situation becomes unruly, then the economy will be badly effected."

He withdrew Rp 450,000 from his savings to buy dollars.

Irvan Gunawan, managing director of another money changer, PT Inti Valutama Sukses, said: "Money changer outlets like us could still offer Rp 4,850 per dollar on Tuesday, when the banks' rate was already set at Rp 5,000."

Therefore, most traders whose transactions were in dollars preferred to buy dollars at the money changers rather than go to the banks.

Irvan said one of his customers complained that the rupiah's plunge to Rp 4,850 against the dollar had left him broke.

The customer's rupiah savings were sufficient to cover all his transactions, which had to be paid in dollars, prior to the rupiah's freefall.

Irvan said that most people coming to his office were shell- shocked because the hike was so drastic.

"Earlier they planned to buy at a rate of Rp 4,400 but when they arrived here the price had already jumped to Rp 4,500," he said. (04)