Rupiah remains unaffected by bloody Jakarta clash
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)