Rupiah to ease slightly by year-end, says poll
Rupiah to ease slightly by year-end, says poll
SINGAPORE (Reuter): The Indonesian rupiah is expected to
decline slightly by the year-end with a Reuter poll of 12
analysts and foreign exchange dealers in Jakarta and Singapore
producing a median prediction of 2,965 to the dollar.
At 0530 GMT the rupiah was quoted was quoted at 2,890/2,910.
The poll was conducted on a non-attributable basis as traders
and economists have become increasingly reluctant to provide
forecasts on the record after Malaysia's threats that it could
use harsh security laws to silence critics of its economic
policy.
Most of the those polled expected the rupiah to range between
2,900 to 3,000 to the dollar, but the median result of the poll
does not include the highest estimate of 3,400 or the lowest of
2,725.
When these estimates are included, the poll produced an
average expectation of 2,995 to the dollar.
"I think the rupiah at 2,900 level should be reasonable by the
end of the year, considering the fact that we are heading for a
Presidential election," one U.S foreign bank dealer in Jakarta
said.
He said although people did not expect any surprise from the
election, but there could be some anticipation.
"Otherwise if things are calm, the rupiah could strengthen
further. Others have even higher expectation for the rupiah."
Another American bank dealer said he expected the rupiah to
range around 2,950/3,000 by year-end because of possible profit-
taking from long rupiah positions.
"Historically the underlying tone on dollars is a bit bullish
at year-end," the dealer said.
"Offshore parties are gradually establishing long outright
positions now which I expect to be partially liquidated at year-
end to show their performances," the dealer added.
"I think the level between 2,950 and 3,000 should be a good
level at year-end," the dealer added.
A trader at a European firm in Singapore said he thought a
level around 3,000 was realistic.
"The region will obviously remain highly nervous and
currencies will be prone to test the downside," he said.
"But Indonesia still offers investors a highly attractive
yield and I think that'll help underpin the currency," he said.
However, the exotic currency trader at a European bank who
forecast the rupiah would fall to 3,400 by the year-end was not
so optimistic.
"It's not over for Southeast Asia yet by any means. I reckon
we'll have a period of consolidation and then the regionals --
not just the rupiah -- will start heading south again," he said.
The central bank effectively floated the rupiah on Aug. 14
after removing its intervention band, the parameters outside of
which it had intervened in the market. The rupiah has hit several
historic lows against the dollar since then, most recently 3,070
on Aug. 29.