Rupiah slips again, SBI rates unchanged
JAKARTA (JP): The rupiah slumped for the fourth consecutive day yesterday in response to Bank Indonesia's announcement that short-term promissory note (SBI) rates would remain at their current level, currency dealers said.
They said that offshore operators, who were long in rupiah earlier this week in the hope that the central bank would raise its SBI rates from 45 percent to 60 percent, resold their rupiah after the announcement.
"Most overseas operators, especially from Singapore, bought a significant amount of dollars in response to the announcement by the central bank," a local bank dealer said.
The central bank announced that SBI rates for all maturities would remain unchanged.
Dealers said the rupiah, which opened low at 8,000/8,100 to the U.S. dollar, closed even lower at 8,100/8,300.
Yesterday's close was 3 percent lower than the rupiah's previous close of 8,050 the previous day.
Currency dealers also attributed the rupiah's persistent fall to bulk dollar buying by some Indonesian corporations to meet their overseas obligations.
They said the lack of fresh incentives in the currency market, such as fresh developments at debt talks in New York on the country's mounting private debts, had forced the rupiah to plunge further.
Concerns over the possibility that students will eventually rally outside campuses has also contributed to the weakening rupiah, they said.
"Political stability poses another discouraging factor for investors," a chief dealer with a joint venture bank said.
As the rupiah declined, the stock prices on the Jakarta Stock Exchange (JSX) fell 0.4 percent as there were no fresh incentives in the stock market, stock brokers said.
They said the JSX composite index fell 2.16 points to 507.90 yesterday on a total trading volume of about 452.08 million shares changing hands on the regular market worth Rp 448.20 billion (US$ 54.65 million).
"The market is very quiet as investors do not know where to go," a broker with a joint venture securities firm said. (aly)