Rupiah further strengthened
JAKARTA (JP): The rupiah strengthened further against the U.S. dollar yesterday as the upward turn in share prices continued.
Foreign currency dealers said the rupiah, which weakened to as low as 3,640 in midday trading, recovered to close at 3,605/15 in late trading compared with the opening of 3,610/20.
"The central bank was seen in the market selling a very small amount of dollars," a dealer said.
Dealers said the central bank sold about US$1 million to $2 million in the market.
Some said transactions in the forex market were relatively thin as investors were still waiting for the announcement on the International Monetary Fund (IMF)-led financial package to bail out the country's monetary sector.
Minister of Finance Mar'ie Muhammad said yesterday that the government would soon announce the outcome of the financial package that would be used to help improve the country's economy.
A reliable source said the government would announce details of the financial package on Monday next week.
The strengthening rupiah perforated into trading activities at the Jakarta Stock Exchange (JSX) with the main price indicator closing 6.5 percent higher, or 30.82 points, to 502.87 yesterday.
Some 543.5 million shares changed hands in the regular market valued at Rp 581.2 billion ($163.71 million).
Stock brokers said some investors continued to buy certain selected big cap and second-line stocks in response to the global and regional recovery, and speculation of the results of IMF's financial assistance for the Indonesian government.
"I think most investors were in the market with an expectation that the government would announce the result of the IMF aid late this week," a stock broker with a joint venture securities firm said.
The broker also attributed the high buying sentiment to the recovery of other Asian and global markets.
However, head of research of WI Carr Indonesia Pablo Zuanic said financial assistance from the IMF would have a long-term impact on Indonesia's economy.
"I think the IMF will propose structural reform in the way the Indonesian government manages its economy. The package will have long-term implications for Indonesia, which in turn could bolster investment," he told The Jakarta Post.
Mohammad Syahrial, head of research at Pentasena Securities, shared Pablo's view saying the IMF package would not aim to improve the country's economy in the short term but in the long term. (aly)