Rupiah and stock market prices gain ground
Rupiah and stock market prices gain ground
JAKARTA (JP): The rupiah and stock prices gained ground
yesterday in line with similar gains in some regional markets,
dealers and brokers said yesterday.
Currency dealers said the rupiah, which fell through the level
of 3,000 against the U.S. dollar Monday, rebounded to test the
resistance level.
Spot rupiah rose to close at 2,995/2,999 yesterday, compared
with an opening of 3,020/2,030 and Monday's close of 3,028/3,035.
One local bank chief dealer said the rupiah was dragged down
on Monday by the Malaysian ringgit and he saw no reason for the
rupiah to fall further as it was basically undervalued.
He said foreign players were now considering the rupiah and
some of them had even converted their dollars to rupiah.
"But local corporations were still hungry for the dollar. If
local appetite for the dollar dies down, the rupiah will quickly
and easily rebound to the 2,800 level," he said.
He said the rupiah's rebound in the wake of lower interest
rates was a good sign.
Bank Indonesia, the central bank, for the fourth time cut its
benchmark short-term SBI rates for one to three-month papers by
one to two percentage points to a range of 17 percent to 21
percent.
He said the central bank had called in executives of the seven
state banks and 10 or 12 of the largest private banks and advised
them to lower their deposit rates.
State banks must fix their deposit rates at three percentage
points over SBI rates, and the 10 or 12 largest private banks
must fix their rates at four percentage points over SBI rates, he
said.
He said liquidity eased yesterday as the central bank had
helped a number of banks with fresh liquidity. Besides, maturing
SBIs reached Rp 1.1 trillion yesterday.
Overnight swaps eased to 0.85/0.95 and tom/next at 0.70/0.85.
One-week swaps were at 6/7, one-month at 32/38, two at 67/69,
three at 95/100, six at 192/195 and one-year at 375/380.
Rupiah recovery sent positive sentiment to the Jakarta Stock
Exchange, but most traders still chose to stay on the sidelines,
stockbrokers said.
Share prices on the Jakarta Stock Exchange gained 0.7 percent,
with the composite index closing up 3.882 points at 539.483.
Turnover totaled 200.4 million shares valued at Rp 259.738
billion (US$86.6 million).
Harita Securities president Christina Lim attributed
yesterday's meager trading volume to the lack of long-term
investors in the market.
She warned that the market would remain bearish in the short
term as money would stay in fixed-income instruments.
"The central bank has lowered rates on short-term SBI papers,
but it still grips liquidity, and investors do not have the money
to enter the market," she said. (aly/rid)