Rupiah slides against dollar as stock prices fall

JAKARTA (JP): The rupiah slid against the U.S. dollar again yesterday and stock prices on the Jakarta Stock Exchange (JSX) continued their decline in quiet trading amid fears of a worsening economic situation and lingering political tension.

Currency dealers said the rupiah was barely traded yesterday. It closed at 11,750 against the greenback, compared to Friday's close of 11,500.

They said the positive market response over the successful debt accord late last week, producing a rollover plan for the country's mounting private debt, did not last long because political uncertainties continued to overshadow the economic factors.

"The debt accord is good, but offshore funds continue to stay away from our currency market due to political risks," a chief dealer with a local private bank said.

He predicted that even the possible commitment from the International Monetary Fund to disburse US$1 billion of its second tranche of the $43 bailout package would not be able to prop up the rupiah unless social and political uncertainties faded.

"The IMF loan, like the debt accord, will only prevent the rupiah from declining further," the dealer said, adding that the rupiah would likely to continue to hover around 11,000 to 12,000 against the dollar.

Dealers said the rupiah's fate would also be influenced by the movement of the Japanese yen, which fell beyond 140 to the dollar yesterday.

Following the decline in the rupiah, stock prices on the JSX fell 0.09 points yesterday to close at 409.41 on a total turnover of 190.40 million shares valued at Rp 195.34 billion (US$17.75 million).

Stockbrokers said that trading activities were extremely thin as investors did not have any appetite to put significant funds into the country's battered market.

"It is just another blue day as there are no foreign investors who are willing to put their funds here right now," Hendra Sunarto, a broker with Bali Securities said.

Stockbrokers said that local and foreign investors continued to discard stocks linked to Soeharto's family and cronies because those companies had been under public scrutiny over the past few weeks.

The stock price of Bimantara Citra, a giant conglomerate controlled by Soeharto's second son Bambang Trihatmodjo, shed Rp 25 to Rp 300 on 468,500 shares traded, toll-road operator Citra Marga Nusaphala Persada, controlled by Soeharto's eldest daughter Siti Hardijanti Rukmana slid Rp 50 to Rp 300 on 2.96 million shares and noodle maker Indofood Sukses Makmur, a unit of Salim Group controlled by Liem Sioe Liong, a long associate of Soeharto, fell Rp 175 to Rp 1,325 on 39.39 million shares traded. (aly)