Rupiah hits 8,000, stocks rise 2.8%

JAKARTA (JP): The rupiah slipped to hit an intraday low at 8,000 against the U.S. dollar on Wednesday in thin dealing as stock prices closed 2.8 percent firmer, currency dealers and stockbrokers said.

Currency dealers attributed the rupiah's fall to fresh dollar demand from local commercial banks. The market shrugged off good news about a new disbursement of international loans for Indonesia.

The rupiah opened Jakarta trading at 7,800/7,900 and fell to 8,000 in morning trade before settling at 7,725 at the close. It was still 1.6 percent lower than at its close on Tuesday at 7,600.

A chief dealer with a local private bank said state banks unloaded a small amount of dollars, which apparently halted the rupiah's slide.

"But I believe the rupiah will be lifted again following the disbursement of the IMF loans," he said.

The International Monetary Fund approved on Tuesday the release of another US$957 million loan to Indonesia under the $49 billion rescue package the Fund assembled for the country.

Nevertheless, dealers said heightening political tensions would continue to cast a shadow on the rupiah's standing in the future.

Unlike the rupiah, share prices on the Jakarta Stock Exchange (JSX) rose significantly by 2.8 percent on Wednesday, driven by bullish sentiment in the regional market following the overnight rise on Wall Street.

The JSX Composite Index closed 11.49 points firmer at 412.69 on a total turnover of 225.07 million shares changing hands at Rp 303.45 billion.

However, losses led gains by 53 to 51 with 86 stocks unchanged.

An institutional sales broker at Trimegah Securindolestari, Vonny Juwono, said bullish regional sentiment was behind the rise in the local index.

"It was this bullish sentiment in other regional markets which helped the local stocks to strengthen," Vonny said.

Head of research of BNI Securities Adrain Rusmana said that the increase in share prices did not necessarily reflect the return of foreign investors into the battered local bourse.

"It is out of the question as foreign investors are still scared to invest in the market for political reasons," he said.

Trading in the local market was marked by a 30 minute delay for each session due to software problems. (aly)