Rupiah unmoved by release of full Bank Bali audit
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)