Rupiah remains unaffected by bloody Jakarta clash
JAKARTA (JP): The rupiah remained steady on Friday, practically unmoved by bloody clashes between antigovernment demonstrators and security personnel.
Currency dealers said the rupiah weakened in morning trade and breached the 8,000 level but bounced back in the afternoon in very thin dealing.
Dealers said that certain market participants, especially from Singapore, rushed to purchase dollars in the morning after the Armed Forces Commander Gen. Wiranto requested people to stay at home given the unfavorable political climate on the last day of the Special Session of the People's Consultative Assembly (MPR) on Friday.
"Some offshore operators rushed to buy dollars in the morning as they feared massive violence," a chief dealer with a joint venture bank said.
He said dollar demand forced the rupiah to hit an intra-day low of 8,200 to the dollar before recovering to 7,850 at the close, a slight rise from 7,900 on Thursday.
Coordinating Minister for Economy, Finance and Industry Ginandjar Kartasasmita was quoted by Dow Jones Newswires in Kuala Lumpur on Friday as saying that the rupiah had not been affected by student demonstrations.
As the session concluded on Friday, tens of thousands of pro- reform student protesters who had swarmed onto Jakarta's main streets clashed with security officers, who fired volleys of rubber bullets, tear gas and water cannon to prevent the students from heading to the MPR complex.
The confrontation left a number of students dead.
Most banks and offices closed much earlier than usual on Friday following the renewed confrontations.
Ginandjar also said that the rupiah's strengthening was natural as Bank Indonesia had not intervened in the market.
Nevertheless, some dealers suspected some presence of the central bank in the market to shore up the currency.
"Though it is difficult to see the central bank's presence, I strongly suspect it intervened in the market. It's easy for the central bank to guard the rupiah in this thin market," one dealer said.
He said the central bank now had enough bullets to defend the rupiah following the disbursement of US$1 billion in bailout funds by the International Monetary Fund (IMF) this week.
Ginandjar also said in Kuala Lumpur on Friday that Indonesia was still talking with the IMF about implementing a system to monitor capital flows into and out of the country.
An informed source at the National Development Planning Board said Indonesia was unlikely to finalize its latest letter of intent with the IMF until Sunday, and not on Friday as previously stated by Ginandjar.
Share prices on the Jakarta Stock Exchange (JSX) fell slightly on Friday in an extremely quiet trading as most traders were absent from trading.
The JSX main price gauge fell 2.43 points to 355.54 on a total turnover of around 264.23 million shares changing hands valued at Rp 187.51 billion.
Losers outnumbered gainers by 29 to 28 with 77 stocks remained unchanged.
Antonio Yongnata, a sales manager with Mashill Jaya Securities, said that profit taking ahead of the weekend coupled with market fear for political instability had forced certain investors to discard certain stocks.
"Profit-taking in the cloudy political environment at home led stock prices to decline," he said.
Stockbrokers said that the trading floor at the JSX building on Jl. Sudirman in South Jakarta was almost closed after the lunch break as only 25 percent of the seats on the trading floor were occupied by traders.
"The market was practically crippled after lunch as more than half the traders had left the trading floor," a broker with a local securities company said. (aly/rid)