Rupiah ends down on corporate dollar demand
Rupiah ends down on corporate dollar demand
Dow Jones Jakarta
The Indonesian rupiah ended slightly lower on Wednesday on corporate dollar demand powered by high global oil prices, dealers said.
The dollar closed at Rp 9,781, a notch up from the on Tuesday close of Rp 9,780. The U.S. unit hit a high of Rp 9,785 in intraday trading.
"Today was the same old story of domestic corporate (dollar) demand linked to high oil prices," a dealer at a foreign bank said.
Dealers said that the possibility of global oil prices increasing further may test a central bank "psychological barrier" of Rp 9,800 on Thursday.
Global oil prices have hovered around US$60 per barrel in recent weeks and the benchmark August crude oil price rose 24 cents on Wednesday to $60.86 per barrel.
Investors were also closely watching the potential impact on currency markets of the 12:30 GMT release of U.S. trade deficit data.
Market activity may slow slightly on Thursday due to the implementation of new foreign exchange rules unveiled last month. The regulations place new restrictions on the currency market activity of offshore investors.
The rules aim to deter speculation and limit weakness in the rupiah. The currency hit a more-than-three-year low against the dollar last week, but then rebounded on a government currency support plan.
Investors already have been squaring their positions in the weeks since the central bank announced the new rules.
The dollar will likely trade between Rp 9,775 and Rp 9,825 on Thursday, dealers said.
Indonesian shares ended higher on Wednesday as late buying in bellwether Telekomunikasi Indonesia on expectations of improved first-half earnings erased the market's earlier losses, dealers said.
Gains in several regional markets such as in Singapore and Thailand also spurred positive sentiment on the local bourse, traders said.
"Buying, however wasn't that strong," said a trader with Andalan Artha Advisindo, noting lingering concerns over high interest rates.
Bank Indonesia on Wednesday increased its key rate on one- month Bank Indonesia notes to 8.49 percent from 8.44 percent previously.
The Jakarta Stock Exchange's Composite Index closed up 3.679 points, or 0.3 percent, at 1132.794 after spending most of the session in negative territory.
Gainers led decliners 76 to 32, with 79 stocks unchanged. Volume was 1.5 billion shares valued at Rp 1.2 trillion, compared with two billion shares valued at Rp 1 trillion on Tuesday.
On the upside, Telekomunikasi Indonesia, or Telkom, rose 2 percent to Rp 5,100 ahead of its plan to pay a dividend of Rp 152 a share to shareholders registered as of Friday.
Paper producer Tjiwi Kimia jumped 11 percent to Rp 3,025 on expectations of improved 2005 financial performance after a debt restructuring last month. Bank Lippo advanced 7.4 percent to Rp 1,460 on hopes that consortium Swissasia will sell its stake in the bank at a premium.
On the downside, automotive company Astra International lost 2.3 percent to Rp 12,650 on swift profit-taking after gaining 2.4 percent on Tuesday on news it will buy a 54 percent stake in a toll-road company.
Dealers said they expect Indonesian shares to trade higher on Thursday, led by further gains in Telkom.