Rupiah continues bullish performance

Rupiah continues bullish performance

JAKARTA (JP): The rupiah maintained its bullish performance
for a third consecutive day on Thursday although some feared that
political pressure against President Abdurrahman Wahid would
intensify in the coming days following his refusal to answer the
request from the House of Representatives to explain the firing
of two ministers.

Currency dealers said the Indonesian currency ended the day
1.5 percent higher at 8,890 against the U.S. dollar as compared
to 9,018 in late trading on Wednesday.

The rupiah rose to a range of between Rp 8,870 and 8,890 in
the morning trade as the market gave a positive reaction to the
presence of President Abdurrahman, more popularly called Gus Dur,
at the meeting.

But unfortunately Gus Dur's presence at the meeting was not
aimed at answering questions but to defy the legislature's right
of interpellation. This caused the rupiah to dive as low as 9,210
around lunch time as some feared that the President's refusal
would further intensify current conflicts.

Profit-taking in late trading, however, helped the rupiah to
recover to the Rp 9,000 level.

A dealer at a Singaporean joint venture bank said that the
strengthening of the rupiah was due to Bank Indonesia's
intervention.

"It is understandable that they have to defend the rupiah
after it had been continuously rebounding for a few days prior to
Gus Dur's visit to the House of Representatives," he said.

He supported the central bank's intervention as such a move
could further encourage players who had earlier bought dollars on
bad news to square their long dollar positions.

"The central bank has to try to bring back the rupiah to its
late June 8,750 level so as to trigger more and more participants
to cut losses on their recent dollar holdings," he said.

He added the 8,750 level was critical for the rupiah, as this
level was the starting point for the rupiah's roller coaster ride
this time around immediately following a bomb explosion at the
Attorney General's office.

He predicted the rupiah would be traded in a wide range of
between 8,750 and 9,150 on Friday.

Unlike the rupiah, the Jakarta Stock Exchange (JSX) Composite
Index ended one-third of a point down at 513.39 on Thursday.

Erwin S. Widjojo of Indovest Securities said the equity
market, however, had a good start early in the morning session on
Thursday, briefly booking some positive gains.

But the Composite Index then shifted direction late morning
and took a rather quick dive.(udi)