Rupiah stable, needs no BI intervention: Soedradjat
Rupiah stable, needs no BI intervention: Soedradjat
JAKARTA (JP): The Indonesian rupiah was stable against the
U.S. dollar and share prices on the Jakarta Stock Exchange (JSX)
increased slightly yesterday after three jittery days of concern
over President Soeharto's health.
Bank Indonesia Governor J. Soedradjad Djiwandono said
yesterday that the recent volatility of the rupiah has not yet
required intervention from the central bank.
"Bank Indonesia has not conducted any market intervention.
However, we continue to maintain vigilance," Soedradjad told
journalists after speaking at the golden anniversary of state-
owned Bank Negara Indonesia 1946.
On the Jakarta spot market, the dollar closed at Rp
2,338.25/Rp 2,339.00, compared with an opening of Rp 2,339.25/Rp
2,340.25 yesterday. In Singapore, the dollar was quoted slightly
higher against the rupiah, at Rp 2,338.50 from Rp 2,337.00 a day
earlier.
Soedradjad noted that the recent movements of the greenback
against the rupiah have been within the range of the central
bank's intervention band.
In a move to curb speculation on the money market, Bank
Indonesia last month widened its rupiah-dollar intervention band
to Rp 118 (5 percent) from Rp 66 (3 percent).
Even when the greenback rallied at Rp 2,348 last Thursday, it
was still below the middle rate of the central bank's
intervention band. The value of spot trading among local banks
was very small, amounting to only US$60 million to $70 million,
from a total of $5 billion a day.
"That's peanuts," Soedradjad said, noting that the jitters did
not force the central bank to touch its foreign exchange
reserves.
Bank Indonesia, he added, keeps enough reserves to tackle a
possible rush for the dollar. It also holds stand-by loans
totaling $2 billion for the matter. In addition, it has signed a
number of repurchase agreements with other central banks in the
region, aimed at providing funds to defend regional currencies
from speculative attacks.
Minister of Finance Mar'ie Muhammad said last week, when the
rupiah was under attack, that the government was ready to match
speculators' attacks on the rupiah in a bid to stabilize the
currency.
Soedradjad acknowledged yesterday that concerns on Soeharto's
health continued to daunt the market. He vowed to remain vigilant
over the possibility of a sudden attack on the rupiah.
Soeharto is now at a renowned heart clinic in Bad Oeynhausen,
Germany, for medical treatment. The clinic's head doctor, Reiner
Koerfer, was reported by AFP as saying that Soeharto was "in
better health than many people think."
"But I think investors' confidence has yet to completely
recover," Rizal Prasetyo, an executive of PT Jardine Fleming
Nusantara, told The Jakarta Post.
"It needs more time until everything is clearly disclosed," he
added.
Share prices on the JSX inched up 0.2 percent yesterday. The
JSX composite index actually managed to increase three points,
but then closed only 1.06 points higher, at 574.89 points.
Yesterday's total transactions reached 101 million shares,
worth Rp 253 billion.
Commenting on investors' sentiment, Nurkhamid Akhmad, a senior
trader on the JSX, said: "The easing concern on Soeharto's health
was good news for PT Cahaya Kalbar, which is listed today. It
might have been different if it was listed last Friday. (alo/rid)