Rupiah ends at 8-week low on dollar demand

Rupiah ends at 8-week low on dollar demand

The rupiah closed at an eight-week low on Friday on rising dollar demand from local companies to pay offshore obligations at the end of the month.

The dollar closed at Rp 9,320, up from its close of 9,290 Thursday and its highest closing level since June 30, when it ended at 9,395.

A correction in the dollar against most Asian currencies, however, slowed down its rise versus the rupiah, dealers said.

"Most offshore players sold the dollar on rises," said a dealer with a foreign bank.

Dealers said there was no sign of Bank Indonesia's intervention in the market Friday to help the rupiah. The central bank was suspected of selling the greenback on Thursday via state banks.

Dealers expect the dollar to trade in a higher range on Monday between 9,290 and 9,350 as more local companies are likely to buy dollars for month-end debt repayments.

Dealers also expect local companies to accumulate dollars in the near term as the political temperature rises ahead of the presidential runoff Sept. 20.

Meanwhile, shares ended higher, led by gains in carmaker Astra International on its plan to launch a new multipurpose vehicle in September and bid for a Bank Permata stake, dealers said.

Gains in most Asian markets and easing oil prices provided support to the local bourse for a further rebound, they added.

"The market recovered from losses earlier this week," said a trader with a local securities firm.

The Jakarta Stock Exchange Composite ended up 11.506 points, or 1.6 percent, at 746.760. Gainers led decliners 79 to 25, with 71 stocks unchanged. Volume was 592 million shares valued at Rp 580 billion.

Carmaker Astra International was up Rp 300, or 4.9 percent, at Rp 6,400 on expectations that its tie-up with Standard Chartered to buy Bank Permata will boost its future financial outlook.

Dealers said they expect the market Monday to remain higher on a further buying in select blue chips. -- Dow Jones