Rupiah up late on dollar profit-taking, stop-losses

Rupiah up late on dollar profit-taking, stop-losses

JAKARTA (Dow Jones): The Indonesian rupiah rose 2 percent late
Wednesday, as it extended Tuesday's technical rebound amid easing
political tensions in Jakarta, dealers said.

Around 0920 GMT, the dollar was at Rp 9,130, down from around
Rp 9,330 late Tuesday, but up from Wednesday's intraday low of Rp
9,115.

Early in the day, dollar-selling by a large U.S. investment
bank around Rp 9,310 to Rp 9,320 prompted interbank participants
to unload their dollar positions, sending the dollar below the
9,300 support level, dealers said.

Stop-loss sell orders were triggered as the dollar's support
levels against the rupiah caved in one after another, dealers
said.

Senior Economics Minister Rizal Ramli's comments that Bank
Indonesia hadn't intervened to support the rupiah Wednesday
quashed speculation state banks were selling dollars on behalf of
the central bank.

Rizal said the rupiah had strengthened Wednesday after Vice
President Megawati Sukarnoputri urged her party Tuesday to stand
behind Wahid.

Dealers said they expected the dollar's next psychological
support of Rp 9,100 to hold as sentiment on the rupiah remains
bearish, with the domestic political situation still susceptible
to another flare up.

"I certainly think it's a buy on dips," said a dealer at a
European bank.

The weighted average interest rate on one-month Sertifikat
Bank Indonesia notes rose quite sharply at Wednesday's weekly
auction, amid concerns over inflation, but this will unlikely
provide any additional boost to the rupiah as political
uncertainties loom, dealers said.

The one-month SBI notes stood at 13.81 percent at the weekly
auction Wednesday, up from 13.74 percent at last week's auction,
Bank Indonesia said.

Meanwhile, Most Asian currencies closed stronger in Asia
Wednesday, after an overnight rebound in the Nasdaq dispelled
some of the gloom plaguing the region while signs emerged that
South Korea might be making progress in restructuring its
economy.

The New Taiwan dollar, however, ended lower Wednesday amid
outflows of foreign equity funds from the local market, traders
noted.

A holiday in the Philippines - where political turmoil has
hurt sentiment in the region as a whole in recent weeks - also
contributed to the respite in markets Wednesday.

The South Korean won was swept higher as stock prices in Seoul
soared in response to the Nasdaq's 5.6 percent overnight jump and
signs that the government might be getting out of the business of
propping up teetering companies - which could be a positive
development for the economy in the long run.

The Singapore dollar and the Thai baht were lifted in part by
buoyant rupiah and won. However, a new rule in Thailand that
kicked in Wednesday requiring traders to report the purpose of
each foreign exchange transaction stifled trading in the baht,
dealers said.

Late Wednesday, the U.S. dollar at S$1.7498, easing from
S$1.7563 late Tuesday. The U.S. currency was quoted at 43.630
baht, down from 43.885 baht Tuesday.

Late Wednesday, the U.S. dollar was at 1136.0 won, down from
1139.70 won late Tuesday.

The Taiwan dollar bucked the general trend Wednesday, falling
against its U.S. counterpart. Intervention by the central bank
supported the Taiwan dollar during thin early trading, but the
currency eventually succumbed to weakness in local stock prices.

Taiwan's main stock index Wednesday closed down 119.16 points
at 5425.02.