Rupiah ends down as central bank intervenes

Rupiah ends down as central bank intervenes

Dow Jones
Jakarta

The Indonesian rupiah ended lower on Thursday as the market
tracked a strong dollar, but central bank intervention helped
cushion the local currency's slide, dealers said.

The dollar closed at Rp 9,805, up from Rp 9,781 on Wednesday.
The dollar peaked at Rp 9,823 in intraday trading.

"We expected the rupiah to go much (lower), but it didn't
because Bank Indonesia sold dollars though state banks at the Rp
9,820 mark," a dealer at a foreign bank said.

The release late Wednesday of data showing that the U.S. trade
deficit narrowed in May prompted a surge in the U.S. unit against
the Japanese yen that local investors tracked with dollar
purchases, dealers said.

They expect the dollar to range from Rp 9,800 to Rp 9,820 on
Friday, with the rupiah likely to gain traction against the
greenback from central bank intervention.

Elsewhere, Indonesian shares ended higher on Thursday, led by
sharp gains in Bank Lippo on expectations that consortium
Swissasia will sell its stake in the bank at a premium, dealers
said.

Gains across Asian markets helped spur buying on the local
bourse, but renewed worries that the central bank may continue to
increase its key interest rate to defend the falling rupiah kept
overall sentiment weak, dealers said.

Bank Indonesia on Wednesday increased its key rate on one-
month Bank Indonesia notes to 8.49 percent from 8.44 percent
previously.

"The interest rate and the rupiah factors discouraged
investors from taking up strong buying positions," said an
analyst with Kuo Capital Securities.

The Jakarta Stock Exchange's Composite Index added 3.775
points, or 0.3 percent, to 1136.569.

Gainers led decliners 71 to 50, with 70 stocks unchanged.
Volume was 1.9 billion shares valued at Rp 1.5 trillion, compared
with 1.5 billion shares valued at Rp 1.2 trillion on Wednesday.

Bank Lippo jumped 8.2 percent to Rp 1,580 on hopes that
Swissasia will sell its 52 percent stake in the bank above the
current market price. Malaysia's Khazanah Nasional Bhd. is
reported as the leading bidder for the Bank Lippo stake.

Among other key stocks, Telekomunikasi Indonesia (Telkom) rose
1 percent to Rp 5,150 ahead of its plan to pay a dividend of Rp
152 a share to shareholders registered as of Friday.

Bank Negara Indonesia rose 1.8 percent to Rp 1,670 on
expectations that the government will proceed to sell up to a 30
percent stake in the bank later this year.

On the downside, automotive company Astra International
continued to succumb to selling pressure, losing 1.2 percent to
Rp 12,500 on renewed worries over declining car sales due to high
interest rates.

Dealers said they expect Indonesian shares to trade slightly
lower Friday on profit-taking after gains in the previous four
sessions.