Rupiah closes firmer against U.S. dollar

JAKARTA (JP): The rupiah closed slightly firmer at 10,875 against the U.S. dollar on Monday, with positive sentiment from disbursement of International Monetary Fund loans tempered by fears of renewed unrest.

Currency dealers said positive market response to the disbursement of US$941 million pledged by the IMF had helped the rupiah hold its ground.

"News of the IMF loan is good but it failed to boost rupiah standing against the American dollar," a dealer with a local bank said.

The rupiah closed last Friday at 10,950.

The dealer said persistent dollar selling for the rupiah by state banks had also improved the currency although market participants remained largely cautious over the political situation at home.

Meanwhile, stock prices on the Jakarta Stock Exchange (JSX) also rose across the board, but the main price index ended slightly lower due to the fall in the market leader PT Telkom.

The JSX Composite Index fell 0.08 percent, or 0.22 points, to 275.00 on a total turnover of 294.24 million shares valued at Rp 152.32 billion.

Gainers led losers 72 to 33, with 69 stocks unchanged.

State-owned domestic telecommunication firm PT Telkom's share price slid Rp 75 to Rp 1,650 on 4.94 million shares changing hands. State-owned international call operator PT Indosat shed Rp 125 to Rp 5,675 on 262,500 shares.

Stockbrokers said that selling pressure on the telecommunication stocks, which account for around one fourth of the market capitalization, had caused the index to end lower.

"The main price index could have increased if these stocks did not fall," an institutional broker with Trimegah Securindo Lestari said.

She said domestic retail investors speculatively bought some second-line and third-line stocks with good prospects in moderate dealing despite lingering fears over domestic political uncertainty.

She said several foreign brokerage firms such as HSBC Securities, ABN Amro and Jardine Fleming were net buyers.

Head of research of Sigma Batara Fadjar Limin Sutandi said that investors remained concerned over the political and economic situation at home, with no signs of recovery in the short term.

"Investors are still fazed by political uncertainty at home," he said, pointing to groundless market speculation of a possible massive demonstration and unrest ahead of the 33rd anniversary of an abortive communist coup on Sept. 30.

The date holds historical importance because it also marked the ascension of Soeharto, who resigned from the presidency in May after a 32-year rule. (aly)