Rupiah breaks 15,000 barrier as stocks decline

Rupiah breaks 15,000 barrier as stocks decline

JAKARTA (JP): The rupiah broke psychologically important level
of Rp 15,000 against the U.S. dollar yesterday as local stock
prices lost 1.7 percent over persistent domestic economic and
political uncertainty and a bearish regional market.

Currency dealers said the rupiah, which opened at Rp
14,600/700, touched the day low of Rp 15,200 in early trading but
recovered slightly in the afternoon to close at Rp 15,100.

Yesterday's close was 2 percent down on the previous days
value at the end of trading.

Currency dealers attributed the fall in the rupiah to a
combination of the weakness of the Japanese yen against the
dollar, persistent political and social uncertainty and high
local demand for the dollar.

"We are just hopeless. The market was very thin, the yen
remained weak and our political situation is not improving," a
dealer with a local private bank said.

The Japanese yen slid to over 146 against the American dollar,
leaving no scope for the rupiah to reverse its similarly
downtrend against the dollar, he said.

The dealer added that local commercial banks required a large
amount of dollars this month because the central bank, Bank
Indonesia, had extended the deadline for them to settle their
dollar debts and trade finance arrears to June 30 from June 12.

"I think the rupiah could fall as low as Rp 17,000 over the
coming days because certain banks have to settle their dollar
obligations," he said.

The rupiah touched its lowest ever level of Rp 17,000 against
the dollar on Jan. 9.

Dealers said worries over political unrest would further
hamper recovery of the country's ailing financial market.

"Although there were no significant protests today
(yesterday), the market senses that the country political
situation is far from secure," he said.

Hundreds of people rioted in Tegal, Central Java, on Monday,
damaging shops, houses and offices.

Dealers said intervention in the money market by the central
bank, who offered short-term promissory notes (SBIs) at 59
percent -- one percent higher than its normal rate of 58 percent
-- did not improve the rupiah's position against the American
dollar.

Stock prices on the Jakarta Stock Exchange (JSX) declined 1.7
percent, dragged down by the sharp fall of shares in cross-listed
telecommunications firms PT Telkom and PT Indosat, and tin mining
firm PT Tambang Timah.

The JSX Composite Index fell 6.98 points to 399.51 points
yesterday on a total turnover of 190 million shares worth Rp 252
billion (US$16.80 million).

Stock prices in Tambang Timah fell Rp 375 to Rp 6,475, Telkom
fell Rp 100 to Rp 3,625 and Indosat fell Rp 600 to Rp 14,900.

Stockbrokers said the movement of the three stocks would
largely determine the direction of the market because of the
sheer number of shares traded in these companies.

Antonio Yongnata, a dealer with Mashill Jaya Securities, said
the absence of offshore funds had worsened the local market.

Head of research at Pentasena Securities Mohammad Syahrial
said yesterday that daily trading transactions on the local stock
market had declined sharply to current levels of around Rp 100
billion, compared to Rp 400 billion several months ago, because
most offshore funds had left the country's dire financial market.

Another analyst at a local securities house said: "The lack of
investor confidence in the local market is the main cause of the
bearish stock market." (aly)