Rupiah gains ground against U.S. dollar

JAKARTA (JP): The rupiah gained more ground against the U.S. dollar yesterday after President B.J. Habibie promised to speed up economic and political reforms.

Spot rupiah closed at 10,500 to the American dollar, a bit stronger than its close at 10,800 the previous day.

The local stock market, however, remained under selling pressure, with the main Jakarta Stock Exchange (JSX) Composite Index losing 1.2 percent in moderate trading.

Currency dealers said the rupiah, which opened at 10,750/10,850, continued its upward trend yesterday, though it had yet to break the psychological level of 10,000.

"Even though the rupiah has not yet broken the 10,000 level, there are strong signals that it will in the coming days," a dealer with a local private bank said.

Dealers said the rupiah opened higher at the London market at 10,100/10,200 after the Jakarta market closed yesterday.

The dealers said President Habibie's reform commitments seemed to have propped up market confidence that the government was serious in implementing political change.

"We have a lot of good news on the political side which should bolster market confidence in the country," the dealer said.

Currency dealers said the rupiah may hover near the 9,000 level against the dollar in the days ahead.

Securities analysts said that the pledges by President B.J. Habibie to hold early elections, release political prisoners and eradicate corruption and nepotism in his government had created a positive impetus in the local market.

Sigma Batara Securities research head Fadjar Limin Sutandi said, however, that investors had yet to feel secure about the country's short term prospects after witnessing the country's recent riots and looting.

"Even though there has been a slight improvement on the political side, the economic side is likely to deteriorate further," he said, pointing out that the riots had caused massive damage to businesses owned by the ethnic Chinese.

The JSX Composite index slumped 1.2 percent or 5.49 points to 434.05 yesterday on a total turnover of 215.83 millions shares worth Rp 207.95 billion (US$19.80 million).

Other Asian stock markets closed lower Tuesday, with the key index in Seoul tumbling to a new 11-year low because of continuing labor turmoil.

In Seoul, Composite Stock Price Index tumbling 5.9 percent, or 19.91 points, to 311.99. It was the index's lowest close since 311.52 on Feb. 4, 1987.

In Tokyo, the 225-issue Nikkei Stock Average rose 101.70 points, or 0.64 percent, closing at 15,884.82. On Monday, the average had slipped 18.53 points, or 0.12 percent.

In Taipei, the market's key Weighted Stock Price Index fell 135.70 points, or 1.6 percent, to 8,178.39.

In New Zealand, the NZSE-40 Capital Index rose 21.45 points, or 0.9 percent, to 2,240.10.

In Hong Kong, the Hang Seng Index fell 62.32 points, or 0.6 percent, closing at 9,482.21.

In Manila, the Philippine Stock Exchange Index of 30 selected issues fell 15.18 points, or 0.7 percent, to 2,109.30.

In Australia, the All Ordinaries Index rose 6.9 points, or 0.2 percent, to 2,734.7.

In Kuala Lumpur, the Composite Index fell 1.6 percent, or 9.27 points, to 561.28.

In Singapore, The Straits Times Industrials Index slipped 1.85 points to 1,312.79.

In Bangkok, the Stock Exchange of Thailand index fell 4.36 points, or 1.2 percent, to 354.54. (aly)