Rupiah stable as regional currencies gain footing
Rupiah stable as regional currencies gain footing
JAKARTA (JP): The rupiah stabilized yesterday against the U.S.
dollar as regional currencies gained footing on the back of a
recovery in the world's major stock markets.
Foreign exchange dealers said the rupiah was stable against
the greenback closing at 3,630/40 compared to the opening of
3,620/45 in the morning trade session.
A local bank chief dealer said Bank Indonesia (the central
bank) was seen guarding the rupiah, as it sold a limited amount
of dollars in the market yesterday.
"The central bank continues to regularly intervene in the
market by selling a limited amount of dollars," the dealer said.
Currency dealers said the foreign exchange market saw little
trading activity because most investors were still waiting for
details of the IMF-led financial assistance for Indonesia.
They said President Soeharto's statement that Singapore would
provide US$10 billion to help Indonesia during the currency
crisis did not have any significant impact on restoring
investors' confidence in the country's currency and stock
markets.
Most Asian currencies also perked up as regional stock
markets erased some of their spectacular losses after Wall Street
soared overnight.
The Singaporean dollar was at 1.5740/60 to the U.S. dollar
after hitting a low of 1.5870 against 1.5780/95 late Tuesday.
"We saw continued buying (of U.S. dollars) after we cleanly
broke through 1.5800. That was some resistance I thought would
hold," a U.S. treasury manager told AFP.
The Malaysian ringgit traded sluggishly, firming to 3.3900/00
against 3.4150/250 Tuesday.
The Thai baht looked soft, particularly in onshore markets
where it hit a low of 39.60 to the dollar amid uncertainty over
the implementation of financial reforms.
"I think ... we're still looking to see the baht head to the
40s," said a regional currencies trader at a European firm in
Singapore.
The Philippine peso firmed to 34.82 to the dollar against
Tuesday's close of 35.15 after central bank governor Gabriel
Singson said Tuesday that he had asked banks not to speculate on
the peso.
The South Korean won ended at another historic low of 964.00
to the dollar and was only kept from diving further by its 2.25-
percent trading band.
The Hong Kong dollar firmed a notch Tuesday to 7.7285/95 to
the U.S. dollar against 7.7310/50. Interbank interest rates eased
as the Hong Kong Monetary Authority added liquidity to the
system, offering three-month funds at 13 percent.
Even the Australian dollar made a bid for recovery, firming to
US$0.7050/57 from Tuesday's close of $0.6923/28, as Wall Street's
rebound reinforced earlier demand from exporters and U.S. funds.
As the rupiah stabilized, shares prices on the Jakarta Stock
Exchange (JSX) closed 5.37 percent higher yesterday following the
strengthening of the Wall Street and the Hong Kong stock
exchanges, stock brokers said.
The JSX composite index, the main price indicator on the JSX,
closed 24.06 points higher to 472.05 as most investors bought
back cheap quality stocks.
Brokers said gainers outnumbered losers 101 to 24 with 48
stocks unchanged.
Brokers said that most blue chips made big gains yesterday
after recording a sharp 8.59-percent plunge Tuesday triggered by
panic selling in most big capitalized stocks by foreign and local
investors.
However, David P. O'Neil of Lippo Securities said yesterday's
increase in the Jakarta stock market was just a technical rebound
following the strengthening of Wall Street and Hong Kong stocks.
He said the stock market would find it difficult to sustain
yesterday's gains for the rest of the week.
"The overall atmosphere will still be volatile for the stock
market in the coming weeks," he said.
Mohammad Syahrial, head of research at Pentasena Securities,
said share prices on the JSX would still decline in the coming
weeks due to the absence of market confidence.
"If large big cap stocks don't recover, there's a strong
possibility that the index might break 415 points in the coming
days," he said.
The lowest level of the index was in April 1995 when it hit
416.45, he said. (aly)