Rupiah falls to 8,200 level to dollar, stock index rises
Rupiah falls to 8,200 level to dollar, stock index rises
JAKARTA (JP): On the last trading day of a helter-skelter
year, the rupiah sank to the 8,200 level against the U.S. dollar
in moderate dealing on Wednesday.
Stock prices rose slightly, with the main price index closing
at 398.03 points.
Currency dealers said the rupiah dipped against the greenback
due to unexpectedly high fresh dollar demand by local commercial
banks.
"The rupiah failed to close firmer as most local commercial
banks were on the buying side," a chief dealer with a joint
venture bank said.
Bank Indonesia Governor Sjahril Sabirin characterized the
increase in dollar demand at yearend as a normal phenomenon.
"It is a common occurrence. There is always a rise in dollar
demand at yearend which keeps the rupiah weak," he said on
Wednesday.
He expressed optimism the beleaguered rupiah would strengthen
against the dollar at the beginning of next year.
"I think the rupiah should appreciate against the dollar
because there are factors to support such a rising trend."
He said the central bank would continue to step into the
market with limited dollar selling for the rupiah.
Although the central bank adopted the same stance on
Wednesday, it failed to prop up the rupiah at the close because
the volume of its dollar selling was smaller than dollar demand.
Dealers said the central bank's limited intervention managed
to bring the rupiah to 7,900 level after the lunch break before
weakening again in the afternoon.
The rupiah eventually closed at 8,075 at the close on
Wednesday, 0.9 percent lower compared to 8,000 the previous day.
The rupiah has lost 46 percent in value against the American
dollar compared to its level at 5,500 from yearend in 1997.
Share prices on the Jakarta Stock Exchange (JSX) closed
slightly firmer, with the benchmark price index rising 1.30
points.
A total of 178.87 million shares, valued at Rp 178.81 billion,
changed hands.
Gainers outnumbered losers by 58 to 53, with 87 stocks
unchanged.
Wednesday's close represented a 0.9 percent drop in the JSX
Composite Price Index from the 401.71 recorded on the first
trading day of this year.
Securities analysts and brokers said that the market was
extremely unstable this year, with the main price index hitting a
year low of 255.46 points on Sept. 21 and a high of 570.65 points
on Feb. 2.
"The market was very volatile as the country was hit by so
many social and political events," said Imelda Kwan, an
institutional sales broker with Trimegah Securindolestari.
Market capitalization, however, rose 9.9 percent to Rp 176
trillion by the end of this year, compared to Rp 160 trillion
recorded last year.
But stockbrokers said that trading activities on Wednesday
remained dull as many securities firms were already closed and
investors were on their yearend holidays.
"But late buying of certain shares kept the index in positive
territory although it was still below the key 400 level,"
Trimegah's Imelda said.
Head of research of BNI Securities Adrian Rusmana said many
foreign fund managers were deterred from entering the local
battered bourse due to huge unresolved economic and political
uncertainties.
"They remained concerned about the country's market. So they
will be watching closely on the development of the country's
political and economic situation next year." (aly)