People told to stay calm over rupiah

People told to stay calm over rupiah

JAKARTA (JP): Bank Indonesia Governor J. Soedradjad Djiwandono
called on the people to remain calm and not rush buying dollars
following yesterday's massive speculative attacks on the rupiah.

Soedradjad also urged local bankers to join the central bank's
concerted effort to fight against the speculative assault on the
rupiah.

"We share a common interest in the life and death of our
national economy," Soedradjad told journalists after attending a
dinner last night, hosted by the Bankers Club Indonesia.

He said people should not panic as they lived here with the
rupiah purchasing power, not the U.S dollar.

"It is true that now the rupiah is weakening against the
dollar. But don't measure the purchasing power of the people with
the dollar, except for those wanting to go abroad," the governor
said.

Yesterday's attacks on the rupiah forced the rupiah to dip to
a historic low of 1,650/55 against the U.S. dollar.

Speculators directed their attacks on the rupiah and Malaysian
ringgit as the Bangkok and Tokyo markets were closed yesterday,
he said.

The governor said the central bank intervened in the market by
selling dollar forward outright to push the rupiah higher and
swaps lower.

"As it is forward, we have not yet taken the money out of our
purse. We will deliver it when it is due," Soedradjad said,
without mentioning the amount of the intervention.

Dealers said the central bank was pumping some US$500 million
through four or five brokers. They said the central bank was
selling six-, three- and one-month dollars outright at the 2,745,
2,685 and 2,638 levels respectively.

The central bank's intervention helped the rupiah ease in
afternoon trading to a level of 2,636/41 at 6.00 p.m. Jakarta
time.

When asked about the possibility of widening the intervention
band to cope with speculative attacks, Soedradjad said his
position presented many dilemmas.

He said if he moved too early he would be accused of
nervousness but if he moved too late he would be criticized for
not anticipating events.

"We have done our best and hope that we can cope with the
problem," Soedradjad said. (rid)