Rupiah returns to mid-Sept. levels after Bali blast
Rupiah returns to mid-Sept. levels after Bali blast
The Jakarta Post, Jakarta
The rupiah broke through the Rp 9,000 level against the U.S.
dollar for the first time after the Oct. 12 Bali bombing, mainly
on the back of suspected dollar selling by state companies.
Monday trading saw the rupiah return to its levels in mid-
September, as it ended higher at Rp 8,995 from its opening at Rp
9,035.
"Many state companies have been seen selling dollars lately,"
the head of foreign exchange market division at the Standard
Chartered Bank, Yudhi Wirawan, said, adding that companies
purchased the rupiah to make dividend or tax payments to the
government.
The rupiah plunged to Rp 9,330 in the first trading day after
the Bali bombing, as market players were concerned with the
subsequent bleaker economic outlook.
Bank Indonesia helped break the fall with dollar selling but
Yudhi said the central bank had ceased market intervention upon
seeing the rupiah was recovering.
Analysts said the market was heartened by the steady progress
in the investigation of the Bali bombing, and the government's
tougher stance toward terrorism.
Since last week the rupiah was flirting again with the Rp
8,000 level, which was also due in part to a weaker dollar in the
regional market and as companies prepared rupiah payments for
holiday bonuses.
"I heard IBRA (the Indonesian Bank Restructuring Agency) was
also dumping their dollars," Yudhi said.
The agency, which is in charge of selling state assets,
converts dollar earnings into rupiah before transferring proceeds
to the government.
Bank Indonesia senior deputy governor Anwar Nasution confirmed
IBRA's recent dollar selling, but could not say whether the
agency repeated the action on Monday.
IBRA recently sold a 51 percent stake in Bank Niaga for about
US$116 million to a Malaysian investor who has yet to pay.
Payment is due by next Monday, meaning the additional dollar
supply could help sustain the rupiah's recent gains.
Yudhi said, however, that toward year's end the local currency
would likely retreat to about Rp 9,200 partly on foreign debt
payments.