Rupiah, stock market continue to stabilize
JAKARTA (JP): The rupiah stabilized against the U.S. dollar at the 5,000 level yesterday, while the stock market barely closed higher.
Currency dealers said the rupiah was hovering between 4,950 and 5,300 throughout the day on ample liquidity in a thin market.
Spot rupiah closed at 5,000/5,200 in Jakarta against an opening of 5,200/5,300.
Dealers said demand for the dollar remained high, but the supply was beginning to improve as some local export-oriented firms were seen unloading dollars.
"The dominant tone was looking good today (yesterday) as more and more local corporations were seen selling dollars," a local bank chief dealer said.
"If this supply continues, I believe the rupiah will break the 5,000 resistance level next week," the chief dealer said.
But local dealers called for intervention by the central bank to trigger stop-loss limits because most local companies with mounting foreign debt would face difficulties if they had to purchase dollars at the 5,000 level.
The chairman of the Bakrie Group, Aburizal Bakrie, said yesterday that companies under his group, and probably those under other groups, would be comfortable with the rupiah rate at between 4,500 and 4,000.
Local dealers said trading remained quiet due to the approaching end of the year, and trading spreads were narrowing further to between 100 and 200 points as operators calmed down after recent volatility due to groundless speculation on President Soeharto's health.
Various rumors still inundated the market, like one on possible closures of more private banks after the government revoked the licenses of 16 private banks earlier last month.
Bank Indonesia's credit director Mukhlis Rasyid said in a statement that such baseless rumors were deliberately disseminated by irresponsible people who wanted to create chaos and benefit from it.
Mukhlis appealed to the public not be lured by such unfounded rumors and rely on government policy and information.
"The public's calm is in the interest of all of us to restore national economic stability," he said.
As the rupiah stabilized yesterday, stock prices on the Jakarta Stock Exchange (JSX) scantly rose higher, with the JSX composite index increasing 0.41 points to 378.76.
Total trade turnover was about 554 million shares in the regular market valued at Rp 464.54 billion (US$92.9 million).
Brokers said a relatively strong rupiah had helped the stock market defy regional weaknesses.
"I think it was the strengthened rupiah which pushed stock prices up yesterday," Christina Lim of Harita Securities said.
Another analyst said the market was waiting for the government to quickly take clear constructive action to help boost the declining stock prices.
"Concerns over the President's health have declined, but the promised constructive action by the government has yet to be introduced," he said.
Most blue chip stocks ended mixed yesterday with state-owned domestic telecommunications firm Telkom rising Rp 25 to Rp 2,700 and international telecommunications firm Indosat sliding Rp 250 to Rp 9,500.
Cigarettemaker Sampoerna closed up Rp 25 at Rp 4,150 and competitor Gudang Garam rose Rp 50 to Rp 8,100.
Bank Internasional Indonesia dropped Rp 25 to Rp 350, Bank Negara Indonesia remained unchanged at Rp 525 and Bank Dagang Nasional Indonesia was unchanged at Rp 325. (aly/rid)
Currencies -- Page 11
Demand -- Page 12