Rupiah unmoved by release of full Bank Bali audit

JAKARTA (JP): The House of Representatives' release of the full audit of transactions in the Bank Bali scandal failed to boost the rupiah against the U.S. dollar on Tuesday.

Although long awaited because it is expected to prompt the resumption of international loans to the country, the move exerted almost no impact on the rupiah. It closed at 6,730 against the greenback from 6,750 on Monday.

Share prices on the Jakarta Stock Exchange (JSX) ended down 0.11 percent, with the composite index falling 0.68 points to close at 594.40.

Gainers led losers 52 to 42 with 90 stocks unchanged but the index dropped due to the fall of several blue-chip stocks.

Currency dealers said the news of the release of the audit conducted by PriceWaterhouseCoopers did not affect market sentiment.

He said the market interpreted the scandal as more a political issue than an economic concern.

"The market seems to have reduced its sensitivity to political issues. Now the ratio is 30 percent for political factors and 70 percent for fundamental economic factors."

He said the importance of the government's follow-up on the release of the audit overshadowed the significance of the release itself. A summary of the audit was released previously.

Appropriate legal action against any wrongdoers in the scandal was vital to ensure smooth continuation of the domestic bank restructuring program, he said.

The scandal disrupted the bank restructuring program and suspended the disbursement of the International Monetary Fund- sponsored international loan package to the country.

The IMF director for the Asia Pacific, Hubert Neiss, previously said the disclosure of the full report to the public would pave the way for the resumption of suspended international loans.

Neiss, who arrived in Indonesia on Monday, said he was pleased with the release of the audit and confirmed an intention to restart the review of the country's economic reform program.

The program review is a prerequisite for the disbursement of the loans.

A currency analyst at PT Sandi Mitra Perkasa, Farial Anwar, said the release of the audit had yet to provide positive effects for rupiah trading.

"We will have the capital flight flow back into Indonesia, more people buying shares and, of course, the resumption of the IMF loan disbursement," Farial said.

He said all the developments would supply the market with more dollars and ultimately push the rupiah value up against the greenback.

"The rupiah would most likely breach the 6,500 level at the end of month at the latest," he added.

Dealers said the rupiah's current support level was around the level of 6,500.

They said the market on Tuesday was mainly subdued in thin trading.

"The currency already had good gains on Monday when a number of offshore participants bought rupiah on the progress of talks between the government and the IMF," a dealer said.

Share prices ended mixed with continued selling of some blue chips until late trading.

Dealers said the fall on Wall Street overnight also hurt the sentiment.

Among notable decliners were shares in cigarette maker PT Gudang Garam which fell 1.3 percent or Rp 225 to Rp 17,750.

Instant noodle maker Indofood fell 0.9 percent or Rp 75 to Rp 8,175, despite the company's report on Monday of a surge in net profit during the first nine months of this year. (udi)