Rupiah ends at two-month high

Rupiah ends at two-month high

The rupiah closed at a two-month high on Friday as foreign investors exchanged their dollars into the local unit to pay for their purchases of domestic stocks bought earlier in the week, dealers said.

The dollar closed at Rp 8,935, down from its close Thursday at Rp 9,005. The last time the dollar closed around this level was May 12.

"Some foreign names who usually take part in the (Indonesian) stock market were the main dollar sellers today," said a dealer with a foreign bank.

Shares gained 2.2 percent this week as foreign investors turned bullish after Monday's peaceful presidential election.

Dealers, however, said that the dollar may not fall further next week as the market is likely to focus on the second runoff election in September.

Though the market has welcomed news that President Megawati Soekarnoputri, and not Wiranto, is likely to take on Susilo Bambang Yudhoyono in the next round, some have expressed concerns over the prolonging political uncertainty.

The market wants Wiranto, who has been indicted for crimes against humanity by a U.N.-sponsored tribunal, out of the presidential race, dealers said.

Dealers said the dollar may continue to trade sideways in the short term. They expect the U.S. currency to trade between Rp 8,900 and Rp 9,000 Monday.

Meanwhile, shares ended marginally higher as a late rebound in cigarette and mining blue chips reversed earlier losses, dealers said.

Overall sentiment, however, remained weak and cautious due to political uncertainty ahead of the expected second round of presidential polls, they said.

The Jakarta Stock Exchange's composite index ended up 1.398 points, or 0.2 percent, at 761.140.

Gainers led decliners 67 to 43, while 73 stocks were unchanged. Volume was 1.1 billion shares valued at Rp 558 billion, compared with 1.7 billion shares valued at Rp 908 billion Thursday.

Indonesia's largest cigarette maker, Gudang Garam rose Rp 350, or 2.5 percent, to Rp 14,550 on a rebound after falling 5 percent Thursday.

Shares of tin miner Timah jumped Rp 125, or 6.4 percent, to Rp 2,075 on the government's plan to sell a 14 percent stake in the company at a premium.

Also higher were shares of Indonesian Satellite Corp., which ended up Rp 25, or 0.6 percent, to Rp 4,325 on bargain-hunting.

Indosat's rival Telekomunikasi Indonesia ended unchanged at Rp 7,650.