Rupiah ends up on Bank Indonesia Intervention

Rupiah ends up on Bank Indonesia Intervention

Dow Jones/Jakarta

The Indonesian rupiah closed slightly higher on Friday as Bank
Indonesia reportedly unloaded dollars to prop up the local unit,
dealers said.

The dollar closed at Rp 9,560, down from its close on Thursday
at Rp 9,570. The dollar was well-bid earlier in the day as
several offshore market participants who had short-sold the unit
bought back the currency to lock in profits. But the central bank
persistently sold dollars via state banks, dealers said.

"Some Singaporean-based players cut their dollar-long
positions shortly before trading closed on concerns that Bank
Indonesia may intervene Monday when the players are away on
holiday," a dealer said.

Businesses will be closed in Singapore on Monday.

The market seemed to welcome Bank Indonesia's move to raise
the maximum interest rates on dollar deposits covered by the
government's blanket guarantee by 135 basis points to 2 percent,
effective on Sunday.

An official with the central bank told Dow Jones Newswires on
Friday that the move is aimed at persuading people to keep their
dollar deposits domestically instead of moving their funds out of
the country to get higher returns.

This is eventually expected to help ease the pressure on the
rupiah, which this week fell to its lowest level against the U.S.
dollar in more than three years.

Dealers expect the dollar to trade between Rp 9,530 and Rp
9,600 on Monday, with trading volume expected to be thinner due
to the holiday in Singapore.

Indonesian shares ended lower on Friday, led by selling in
Telekomunikasi Indonesia and Bank Mandiri, with declines in many
Asian markets hurting overall sentiment, dealers said.

"It's a weak and cautious market," said a trader with Kuo
Capital securities. He added that many investors stayed on the
sidelines because of an absence of fresh leads.

The Jakarta Stock Exchange Composite Index ended down 8.744
points, or 0.8 percent, at 1029.613.

Decliners led gainers 91 to 31, with 51 stocks unchanged.

Volume fell to one billion shares valued at Rp 1.1 trillion,
compared with 1.25 billion shares valued at Rp 1.4 trillion on
Thursday.

Telekomunikasi Indonesia, the nation's largest
telecommunication company, led losses, falling 1.7 percent to Rp
4,275 on expectations that its 2004 earnings will be lower than
previous market expectations due to foreign-exchange losses.
Telkom, which has around US$1 billion in debt, plans to announce
earnings on Monday.

Telkom's rival Indonesian Satellite lost 1.1 percent to
Rp 4,325 on expectations of lower first-quarter earnings.

Bank Mandiri, the nation's largest lender by assets, succumbed
to profit-taking, falling 1.8 percent to Rp 1,600 after rising 11
percent on Thursday on bargain-hunting following sharp losses due
to a corruption investigation into the bank's lending practices.

Dealers expect the market to trade higher on Monday on a
rebound in blue-chip banks ahead of the government's plans to
sell a 5 percent stake in Bank Central Asia early next month.