Rupiah and stock prices continue stabilizing

JAKARTA (JP): The rupiah and stock prices continued to stabilize yesterday in response to the government's move to seek financial help from the International Monetary Fund (IMF), dealers and stockbrokers said.

Currency dealers said the rupiah was stable against the U.S. dollar in late trading after making a gradual recovery in the morning.

They said spot rupiah closed at 3,550/70 compared with the opening of 3,535/75 and Wednesday's close of 3,665.

Persistent domestic dollar demand kept the rupiah hovering around the 3,550 level for almost the entire day, dealers said.

The trading range improved yesterday, staying between 3,550 and 3,590 -- lower than the previous range of more than 100 points.

Dealers said that Bank Indonesia, the central bank, continued to intervene in the market yesterday by selling a small amount of dollars.

"The amount has been relatively small, but by doing this, the central bank wants to show the market that it has been doing something," a dealer said.

A local bank dealer said that the mood was relatively bleak yesterday as most operators were reluctant to make an aggressive move.

"Transactions have been relatively small as most dealers hardly made any transactions yesterday," he said.

Most operators wanting to buy dollars were worried about making a deal at a high rate if the help requested by Indonesia from the IMF and other agencies resulted in a further strengthening of the rupiah.

The government announced on Wednesday that it would seek financial help from multilateral institutions, including the IMF and the World Bank, to restore market confidence in Indonesia.

The strengthening rupiah also affected other currencies in the region with the Malaysian ringgit, the Philippine peso and the Singaporean dollar gaining ground. Only the Thai baht lost a bit.

The stabilizing rupiah and the IMF move sent a positive sentiment to the Jakarta Stock Exchange, which saw a 0.4 percent increase in the composite index.

The index closed 2.17 points higher to 521.11 yesterday. Total turnover was 614.7 million shares worth Rp 633.2 billion (US$180.91 million).

Brokers said the IMF move had especially bolstered market sentiment.

However, an analyst with a joint securities firm warned that the feeling would not last long as the market was very cautious with the uncertain direction of the rupiah in the currency market.

He said people were not interested in taking long-term positions and investors were cashing in on gains made in the past few days.

State-owned domestic telecommunications giant Telkom gained Rp 25 to close at Rp 3,650, while state-owned international telecommunications firm Indosat lost Rp 400 at Rp 9,075.

Gudang Garam, the country's largest cigarette maker, lost Rp 200 to close at Rp 9,300, while its rival Sampoerna rose Rp 75 at Rp 5,550.

State-owned Bank Negara Indonesia was up Rp 50 to Rp 800, Bank Internasional Indonesia was unchanged at Rp 750, Bank Dagang Nasional Indonesia closed Rp 25 stronger at Rp 575, while Bank Danamon was up Rp 50 at Rp 625. (aly/rid)

Currencies -- Page 11