Rupiah recovers after hitting 9,000 level

JAKARTA (JP): The rupiah recovered in late trading on Thursday after breaching the 9,000 level against the U.S. dollar amid uncertainty over President B.J. Habibie's rumored resignation.

Currency dealers said that the rupiah, which fell to as low as 9,025 in morning trade, recovered in the afternoon to end the day at 8,500, a bit higher than Rp 8,610 on the previous day's close.

Most stock prices on the local stock exchange, however, surged due to profit-taking by some institutional investors.

A forex dealer at a major local bank said that morning trade fluctuated but later cooled down on the lessening of negative rumors and reported central bank intervention.

Most newspapers published denials on Thursday of Habibie's resignation but speculation that the President could be still in "trouble" heavily shadowed trading activities in early trade, the forex dealers said.

He added that pressure on the rupiah was further eased after the central bank, through state Bank Mandiri and Germany's Deutsche Bank, were seen buying a large amount of dollars.

Shares on the Jakarta Stock Exchange (JSX), riding on the lessening of rumors and the improving rupiah value during the later part of the day, closed 3.3 percent higher on Thursday.

Trading volume was 548 million shares valued at Rp 914.7 billion.

Traders said they suspected government intervention in JSX as well, particularly through the buying of blue chip stocks.

Others said that some investors, having more confidence that the country's Bank Bali scandal was nearing a point of resolution, translated it as a soon-to-arrive market recovery.

"On this fresh optimism, they quickly brought up the market index today (Thursday)," he said.

Shares of state-owned telecommunication companies PT Telkom rose Rp 175 or 6.7 percent to close at Rp 2,775, while PT Indosat closed up 2 percent or Rp 250 to end at Rp 12,350.

Carmaker Astra International also recovered its earlier loss, closing up Rp 200 or 8.7 percent at Rp 2,500.

Retailer PT Matahari Putra Prima gained Rp 75 or 11 percent to finish at Rp 750.

PT Indah Kiat Paper & Pulp soared 21 percent to Rp 2,900 on its debt rating upgrading to A minus by the state rating (bond) agency PT Pefindo. (udi)