Rupiah ends lower amid regionwide weakness on Greenspan testimony
Rupiah ends lower amid regionwide weakness on Greenspan testimony
Dow Jones, Jakarta
The rupiah ended lower on Thursday, tracking losses in major
Asian currencies following further upbeat testimony from U.S.
Federal Reserve Chairman Alan Greenspan overnight.
After hitting an intra-day high of Rp 9,090, the dollar closed
at 9,070, up from its close Wednesday at 9,010.
Greenspan reiterated in Congress that the U.S. economy remains
on a recovery path and reconfirmed the Fed's intention to hike
interest rates gradually, while pledging to fight inflation
should it arise.
Dealers also attributed the rupiah's fall to increased dollar
demand from local companies to repay debt at the end of the
month.
Demand from local companies will likely keep the dollar above
9,000 until the end of the month, they added. Local firms are
saddled with over US$60 billion in offshore borrowing and payment
of such maturing debt usually weighs on the rupiah.
"Underlying sentiment toward the rupiah is weak for the mid-
term period," said a dealer with a state-owned bank.
Dealers expect the dollar to trade between 9,050 and 9,150
Friday.
Meanwhile, shares ended a tad higher with a late rebound in
select bank and automotive blue chips reversing earlier losses,
dealers said.
Overall sentiment, however, remained weak on renewed concerns
that the rupiah may fall further against the U.S. dollar and due
to losses in most Asian markets, they added.
After staying in negative territory for most of the session,
the Jakarta Stock Exchange's composite index ended up just 0.279
point at 761.518.
Gainers led decliners 46 to 43, while 74 stocks were
unchanged. Volume was 985 million shares valued at Rp 601 billion
rupiah.
Car maker Astra International ended up Rp 150, or 2.7 percent,
at 5,800 on expectations of higher first half net profit. The
company is expected to announce the results next month.
Bank Danamon jumped Rp 125, or 3.9 percent, to Rp 3,350 on a
rebound, and cigarette maker Hanjaya Mandala Sampoerna rose Rp
100, or 1.8 percent, to Rp 5,800 for the same reason.
Shares in index heavyweight Telekomunikasi Indonesia dropped
Rp 100, or 1.3 percent, to Rp 7,750 on profit-taking. The stock
gained 2 percent Wednesday.
Dealers expect the market to Friday to trade flat to slightly
higher on a further rebound.