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.