Rupiah remains weak despite IMF's assurance
Rupiah remains weak despite IMF's assurance
JAKARTA (JP): Rupiah remained weak yesterday despite the
International Monetary Fund's (IMF) encouraging statement about
its forthcoming aid for Indonesia.
The rupiah continued to tumble, hitting an intraday low of
14,500 in early trading but recovered slightly to 14,000 at the
end of trading yesterday.
It had closed at 13,900 the previous day.
"Though the rupiah remains weak, it managed to recover
slightly due to profit-taking by some operators ahead of the
weekend," a dealer with a local private bank said.
Currency dealers said that the weak sentiment in the regional
currency market and escalating protests on the country's
political and social fronts further dragged down the currency,
The IMF's Asia Pacific director Hubert Neiss said yesterday
that the agency would speed up the disbursement of its next loan
tranche to Indonesia.
But his statement elicited no positive response in the market.
Neiss said the rupiah's plunge against the U.S. dollar was
attributed to a combination of internal developments and external
factors, including weakness across Asian markets this week.
"The rupiah has been weak for a while because of the economic
situation in Indonesia, and that has not yet turned around," he
told reporters after meeting President B.J. Habibie yesterday .
"And the rupiah has absorbed the effects of the regional
disruption,' he said.
"The whole situation in the region has deteriorated in the
last few days and the rupiah has weakened with it," he said.
An economist with Danareksa Sekuritas, Raden Pardede, said
that persistent unresolved political uncertainties at home
remained a major obstacle to the rupiah and stock market's
recovery.
Following the bearish rupiah, the main index on the Jakarta
Stock Exchange (JSX) closed 0.8 percent lower yesterday, falling
3.17 points to 408.37 on a total turnover of 296.16 million
shares on the regular market worth Rp 328.15 billion (US$23.43
million).
Brokers attributed the fall to profit taking by most investors
on the gains they made on cross-listed stocks like PT Telkom,
Indosat and Tambang Timah.
Stock prices for the above three stocks account for 30 percent
of the total market capitalization on the local exchange.
Telkom's share price fell Rp 150 to Rp 3,550 on a total
turnover of 2.89 million shares, Indosat shed Rp 1,525 to Rp
15,175 on 1.23 million shares and tin miner Tambang Timah slid Rp
75 to Rp 6,900 on 360,000 shares traded.
Brokers said most investors were concentrating on one-day
trading activities.
"There is no medium or long-term investors in the local
market," a broker with Bali Securities said.
The head of Sales of Bahana Securities Bruce Rolph said
yesterday that the country's crippled financial market and
economy was further withered by a bleak economic outlook this
year with soaring inflation and predicted growth of minus 10
percent.
"The overseas general view on Indonesia is bad causing more
offshore funds to get rid of the local market," he said.
Though Rolph praised the government's painstaking measures to
cope with the country's economic and political crisis, more
measures had to be taken.
"President Habibie has done positive things but the country's
problems are so big that much more has to be done," he said.
(aly/prb)