Rupiah recovers against American dollar
Rupiah recovers against American dollar
JAKARTA (JP): The Indonesian rupiah strengthened against the
U.S. dollar yesterday, in what dealers describe as a recovery
after last week's relentless speculative attacks on the currency.
They said the rise of the rupiah followed a surge in other
regional currencies, especially the Malaysian ringgit, after
Malaysian Prime Minister Mahathir Mohamad's warning of possible
action against currency speculators.
Rupiah on the spot market closed at 2,575/2,580 after opening
at 2,607/2,612.
The Jakarta Stock Exchange composite index also rose 0.76
points to 710.81 on the back of stronger rupiah.
Dealers said the rupiah strengthened to 2,567/2,572 by early
afternoon after the central bank, through state banks, sold
dollars on the spot and forward markets.
"In the morning, the market was very quiet. After lunch, it
was revived by the central bank's decision to sell dollars," a
dealer with a local foreign exchange bank said.
Following the central bank's move, offshore operators sold the
dollar down to 2,565 before domestic dollar purchases pushed the
dollar back to 2,590, he said.
Swap rates
He said swap rates were lower, in line with declining dollars
on the spot market.
One-month swap fell to 17.0/20.0 from 21.0/23.0, two to
35.0/42.0 from 42.0/48.0, three to 54.0/60.0 from 63.0/73.0 and
six to 113.0/117.0 from 125.0/135.0 points.
Bank Indonesia, the central bank, still held rupiah short-term
liquidity by maintaining the one-to-three-day Bank Indonesia
Certificate (SBI) rate at 14 percent. Usually the rate is only
7.5 percent.
It maintained the rates for one-week SBI at 10.0 percent, two-
week at 10.5 percent, one-month at 10.5, three at 11.0, six at
11.625 and one-year at 12.25 percent.
Bank LTCB Central Asia vice president and treasury division
head Farial Anwar said the strengthening dollar against regional
currencies would continue to influence rupiah.
But Farial urged local currency dealers not to speculate on
the rupiah at the moment while the currency -- along with other
regional currencies -- was under speculative attack.
"For the time being, please side line from speculation because
it could worsen the situation," Farial said.
Securities analysts said the higher share prices on the
Jakarta Stock Exchange were supported by the stronger rupiah in
the money market.
The composite index rose 0.76 points to 710.81 with a total
turnover of 521.03 million shares valued at Rp 657.42 billion
(US$252.85 million).
But a securities analyst said that despite the strengthening
rupiah, some investors were still worried about its volatility.
Investors would watch the direction of the rupiah closely for
the rest of the week, an analyst said.
"We expect trading activities to strengthen with a strong
rupiah," a dealer said.
Bank Niaga closed Rp 1,050 higher to Rp 7,750 following the
announcement that the Tirtamas group, controlled by Hashim
Djojohadikusumo, would buy 50 percent of the bank. (aly/rid)