Rupiah ends up on suspected BI intervention

Rupiah ends up on suspected BI intervention

Dow Jones/Jakarta

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

The dollar closed at Rp 9,548, down from its close on Friday at Rp 9,560.

The greenback fell to an intraday low of Rp 9,525 as some foreign banks in Jakarta sold the unit after Bank Indonesia allegedly intervened via state banks, dealers said.

But profit taking against the rupiah emerged, forcing the local unit to give up some of its gains.

Dealers said trading was relatively quiet, as Singapore-based market participants were away on a public holiday.

The market welcomed news that on-year inflation eased to 8.12 percent in April from 8.81 percent in March, meaning the erosion of the rupiah's value had slowed.

But news that the trade surplus had fallen to $2.27 billion in March from $2.40 billion a month earlier as import growth continued to outpace export growth will likely keep dollar demand steady.

Dealers expect the dollar to trade between Rp 9,500 and Rp 9,575 on Tuesday.

Indonesian shares ended slightly lower on Monday, led by selling in bellwether Telekomunikasi Indonesia after it reported lower-than-expected first-quarter earnings, dealers said.

News that on-month inflation in April eased to 8.12 percent on-year from 8.8 percent in March didn't affect the market as the central bank is expected to continue to raise its key interest rate to defend the rupiah, dealers said.

"Overall sentiment was weak and cautious," said a trader with Kuo Capital Securities.

The Jakarta Stock Exchange Composite Index ended down 3.091 points, or 0.3 percent, at 1026.52.

Decliners led gainers 74 to 37, with 56 stocks unchanged.

Volume was 730 million shares valued at Rp 668 billion, down from one billion shares valued at Rp 1.1 trillion on Friday.

Telkom, the nation's largest telecommunications company, fell 1.2 percent to Rp 4,225 on news that its first-quarter net profit edged up 3 percent to Rp 1.7 trillion, coming in lower-than- expected due to higher foreign-exchange losses.

Telkom's rival Indonesian Satellite fell 1.2 percent to Rp 4,275 on expectations of weak first-quarter earnings. Indosat plans to announce its earnings later this month.

Dealers said investors continued to sell shares in companies that have dollar debt following the recent decline of the rupiah.

Food maker Indofood Sukses Makmur dropped 2.9 percent to Rp 990 and cement producer Indocement Tunggal Prakarsa lost 0.9 percent to Rp 2,625.

Carmaker Astra International added 1.5 percent to Rp 10,700, holding onto gains after reporting first-quarter net profit rose 25 percent on-year to Rp 1.5 trillion due to an increase in sales.

Dealers expect the market to trade slightly higher on Tuesday on a rebound after declining for two straight sessions.