Rupiah gains further on Boediono euphoria
The Jakarta Post, Jakarta
The rupiah gained ground on the U.S. dollar for the fifth consecutive trading day, with a continued market euphoria over the Cabinet's new economic team propelling the currency on Thursday to its strongest level in the past four months.
The rupiah closed at Rp 9,780 per dollar on Thursday, from its Rp 9,825 trading level on Wednesday, when the new economic team -- which included the widely respected former finance minister Boediono as the new chief economics minister -- was sworn in.
This is the rupiah's strongest position against the American greenback since early August, before it then slumped to a four- year low later that month -- brushing up against Rp 11,000 a dollar -- as a continued rapid rise in global oil prices dented confidence towards the state budget's fiscal sustainability.
The stock market also gained from the upbeat expectation that Boediono would be able to lead the economic team in tackling the rising inflation, with the Jakarta Stock Exchange Composite Index ending up 0.6 percent higher at 1,158.319 points.
Coordinating Minister for the Economy Boediono has brought positive sentiment to the financial markets, having boasted a proven track record of achieving and retaining macroeconomic stability through prudent budgetary policies as the former finance minister during the previous administration of Megawati Soekarnoputri.
The rupiah actually has been gaining since Friday, when President Susilo Bambang Yudhoyono merely mentioned that Boediono could be asked to join the Cabinet to help tackle the current macroeconomic problems, in particular rising inflation.
The currency broke past the Rp 10,000 level to Rp 9,955 on Dec. 5 when the Cabinet reshuffle was to be announced, and further to Rp 9,920 after the announcement affirmed Boediono's ministerial post.
The only thing now that could thwart the rupiah's current advance, dealers said, was either profit-taking or another rise in global oil prices.
Immediately after being sworn in as chief economics minister, Boediono said that a stable rate was indeed crucial in efforts to contain the recent rise in inflation and, that he would work closely with the central bank to achieve that.