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)