Rupiah ends up after BI intervention

Rupiah ends up after BI intervention

Dow Jones, Jakarta

The rupiah ended slightly higher on Wednesday on profit-taking in
the dollar following the recent rise in the U.S. unit and Bank
Indonesia's suspected intervention, dealers said.

The dollar closed at Rp 9,510, as against Tuesday's close of
Rp 9,525.

Bank Indonesia was suspected of unloading dollars again
Wednesday via state banks.

Bank Indonesia Governor Burhanuddin Abdullah confirmed
Wednesday that the central bank had been in the market during the
past few days to slow the dollar's rise. The rupiah ended at an
eight-month low on Tuesday.

Burhanuddin also signaled the central bank's readiness to hike
interest rates more aggressively amid the rising threat of
inflation and ample rupiah liquidity in the money market.

Goldman Sachs said in its latest research note that Bank
Indonesia needs to hike the interest rate on the one-month
Sertifikat Bank Indonesia, or SBI, notes by 100 basis points this
year to send a clearer signal on monetary policy and the rupiah.
The 1-month SBI rate is currently at 7.44%.

Dealers said offshore market participants locked in profit on
the dollar's recent gains, sending the U.S. unit lower against
the rupiah.

"Market players started to go short dollars against most Asian
currencies today, which also spilled over to the dollar-rupiah,"
a dealer with a foreign bank said.

Dealers expect the dollar could fall below Rp 9,500 on
Thursday, but that will depend on the dollar's movement against
its major rivals later on Wednesday.

The greenback could be anywhere between Rp 9,470 and Rp 9,525
on Thursday, they said.

Meanwhile, Indonesian shares ended lower for the fifth
consecutive session led by selling in Indonesian Satellite Corp.
(Indosat) after it reported 2004 net profit fell 74 percent,
dealers said.

They added that many investors also continued to thin their
equity portfolio amid lingering worries that the central bank may
raise interest rates to combat rising inflation and defend the
rupiah.

Continued losses in most Asian markets also added to negative
sentiment, but sporadic bargain-hunting in select bank blue chips
prevented the main index from falling deeper, said a dealer with
Paramitra Securities.

"I hope that the market will rebound on Thursday as selling
pressure reduces," he added.

The Jakarta Stock Exchange Composite Index ended down 5.173
points, or 0.5 percent, at 1065.13, off an earlier low of
1057.95.

Decliners led gainers 85 to 60, with 67 stocks unchanged.

Volume was 2.86 billion shares valued at Rp 2.7 trillion,
compared with 4.2 billion shares valued at Rp 3.3 trillion on
Tuesday.

Indosat, the nation's second-largest telecommunication
company, fell 3.1 percent to Rp 4,750 after the company said its
2004 net profit fell to Rp 1.6 trillion from Rp 6.1 trillion a
year earlier due to an absence of extraordinary gains last year.

Indosat's rival Telekomunikasi Indonesia dropped 1.1 percent
to Rp 4,450 on expectations that it will delay announcing its
2004 earnings due to auditing problems.

It will miss the reporting deadline on Thursday set by the
Jakarta bourse.

Also lower were shares in food company Indofood Sukses Makmur,
which fell 1.8 percent to Rp 1,110 on profit-taking.