Rupiah sinks to 8,725 against dollar, local stocks up slightly
Rupiah sinks to 8,725 against dollar, local stocks up slightly
JAKARTA (JP): The rupiah sank against the U.S. dollar on
Tuesday in extremely thin trading, with most major operators
absent on the Chinese New Year holiday.
Currency dealers said the rupiah, despite opening stronger in
a range of 8,450 to 8,500 against the greenback, fell back at the
close to 8,725.
They said trading turnover on the local foreign exchange
market dropped 20 percent to US$40 million from $50 million the
previous day. Daily trading turnover usually averages about $100
million.
"Trading volume continued falling as most market participants
are still on their holiday," a chief dealer with a joint venture
bank in Jakarta said.
Dealers said the rupiah failed to maintain its upward trend in
the afternoon due to persistent demand from the domestic market.
The fall in the yen against the dollar during the day was the
main contributant to the rupiah's drop, the analysts said.
Dealers said the dollar was bullish against the yen after the
Japanese government announced new steps to curb the recent rise
in long-term interest rates.
Reports said the Bank of Japan expected the rates would fall
with the help of Friday's reduction in the call rate target to
0.15 percent from 0.25 percent.
The yen closed at 116 on Tuesday, down from 114.66 on Monday.
Currency dealers expected the rupiah to remain weak against
the dollar in coming days despite Bank Indonesia's intervention
plan.
"Though Bank Indonesia stepped into the market on Tuesday, it
failed to lift sentiment on the rupiah," a dealer said.
Unlike the sagging fortunes of the rupiah, share prices on the
local market ended 0.4 percent firmer, with the Jakarta Stock
Exchange (JSX) Composite price index rising 1.92 points to close
at 398.84 on total turnover of 44.79 million shares valued at Rp
43.74 billion.
Gainers surpassed losers 32 to 20 with 78 stocks unchanged.
Stockbrokers and analysts said trading turnover further
declined to Rp 43 billion on Tuesday from Rp 60 billion the
previous day, with several regional equity markets closed for the
Chinese New Year.
"Most fund managers are still enjoying their holiday so
trading volume declined," Imelda Kwan, an institutional sales
broker with Trimegah Securindolestari, said.
Stockbrokers said local bargain-hunting on select low-priced
blue-chip stocks in anticipation of a rebound after the holiday
kept the main index in positive territory.
"But such buying sentiment was only short-lived because of no
positive factors from domestic and offshore markets," an analyst
with a local securities firm said.
However, Imelda said certain foreign brokerage firms such as
ABN Amro and Indosuez WICarr were active in placing buying orders
on lower-priced blue-chip stocks. (aly)