Rupiah ends up on suspected intervention
Rupiah ends up on suspected intervention
Dow Jones, Jakarta
The rupiah recouped early losses to end slightly higher Friday
on suspected Bank Indonesia intervention.
Dealers estimated that the central bank sold around $10
million Friday to help the local unit, which was depressed by
dollar demand from local companies.
The dollar ended at Rp 10,500, down from its close Thursday at
Rp 10,560. The dollar had risen to an intraday high of Rp 10,590
shortly after interbank trading opened and before Bank Indonesia
was suspected to have flexed its muscles in the market.
"Unlike Thursday, Bank Indonesia's intervention today was
successful thanks to the thin trading volume," said a dealer with
a foreign bank.
Bank Indonesia doesn't comment on suspected intervention,
although officials have frequently stated that it will defend the
currency if needed.
Dealers said dollar demand will continue ahead of the end of
the year as local companies have to pay maturing offshore debts
and multinational companies here send profits back to their home
countries.
Bank Indonesia is expected to remain the largest dollar
supplier in the market due to the absence of foreign capital
inflows, dealers added.
Meanwhile, most Asian currencies were higher late Friday, as
the South Korean won's inexorable rise to a new eight-month
closing high overpowered the pressure on the region from the
yen's slump past 124 yen to the dollar, dealers said.
Strong foreign equity fund inflows hoisted the won to as high
as 1,270.9 won against the dollar - just shy of the 1,270 won
level that won bulls have been targeting, dealers said.
News that South Korea's economy expanded 1.8 percent year-on-
year in the third quarter helped pushed the dollar below the
psychologically important 1,280 won level Thursday.
The dollar ended at 1,271.8 won, its lowest close since March
9, when it finished at 1,268.8 won. This compares with Thursday's
close of 1,276.8 won.
The won's strength helped improve sentiment toward other
currencies in the region, prompting participants to liquidate
their long U.S. dollar positions against currencies like the
Singapore dollar, the Thai baht and the New Taiwan dollar,
dealers said.