The search for dollar profit: A tale of two cities

The search for dollar profit: A tale of two cities

By Stevie Emilia and Tedy Novan

JAKARTA (JP): "Hurry up, change all your dollars into rupiah
now or you will suffer a great deal. The rupiah's value is
strengthening..." a man on a cellular phone said at a Gunung
Agung money changer here.

He was in a long line with scores of people looking to get the
most from their savings.

The currency turmoil has seen most people suffer -- but a few
have profited, intentionally or otherwise.

In Central Jakarta, Kartika Soebandri, a housewife and a
mother of three, was one of the lucky ones who saved her family
in the rush.

"I'm only a housewife, I don't have time to follow each new
report about the currency crisis. But I was told by my brother,
who works in a private bank, to exchange my savings into
dollars," said Kartika, a senior high school graduate.

She was at first reluctant to do so, she said, because she had
never had dollars before. She decided to make time to look at the
news.

"When I read in the newspapers about the continuous decline of
the rupiah, I followed my brother's advice," said Kartika.

She exchanged all her savings into dollars, when the greenback
was still about Rp 4,000.

"I was only thinking how I could keep making ends meet. My
husband is only a government employee, and all my children are
still at school." said Kartika.

Her husband was at first angry at her for not consulting him
before taking such a step.

"He said I was a fool because he believed the rupiah's value
would increase," said the 38-year-old woman.

When the rupiah dived to Rp 10,000 against the dollar, she was
again advised by her brother to sell some of her savings.

"My husband was finally grateful... our savings have almost
tripled," said Kartika.

She still keeps a few dollars in reserve, "just in case the
rupiah falls again".

In Yogyakarta, Mrs. Said, a 43-year-old housewife from Riau,
also said she never paid attention to currency trading, and had
followed the advice of her son. The family had plans to send the
second of their five children to study overseas.

"Although the dollar has a higher rate than usual, I was
compelled to buy US$5,000," said Mrs. Said, the widow of a
government employee.

IMF

Her savings doubled, and now she follows the news every day
about the value of the rupiah, the President's health and market
analyses.

But she miscalculated the effect of the IMF deal with the
government, thinking the rupiah would strengthen but the opposite
happened.

"I lost, but only $3,000," she said.

The avid reader of The Economist and Business Week
acknowledged she was profiting from the situation, but said "the
government and conglomerates are also to blame for messing up the
economy".

She recently sold $300,000 and managed to renovate her house.
"I got 10 times my original value," said the high school graduate
with a smile.

Mrs. Said now makes an average of three transactions a week,
depending on the exchange rate.

Kartika, Mrs Said and others who thought they were doing the
right thing may be surprised by the recent announcement by the
Indonesian Council of Ulema, that dollar-speculating was haram
(forbidden by Islam).

These included Handayani, a private bank employee in Bendungan
Hilir, Central Jakarta, and a chairperson of a foundation for the
mentally handicapped.

Home

Handayani was also a hesitant participant in the rush to buy
dollars. She exchanged all her savings into dollars following the
closure of 16 private banks last November.

"I was afraid I would lose my job," said the employee, who
bought U.S. currency at a rate of Rp 5,000.

"I didn't have huge savings even after working for more than
five years. And they were effectively getting smaller day by day
with the depreciation (of the rupiah)," said Handayani, who
declined to reveal how much she had saved.

Her plan to buy a dream house was coming increasingly under
threat.

When the dollar reached Rp 10,000, she decided to buy rupiah,
insisting she only exchanged as much as she needed for the house.

Apparently she was disturbed by reports of people profiting
from the high dollar rate, as if she would be labeled among those
oblivious to the suffering of others around them.

"It was hard to decide whether to keep the dollars or to
exchange them into rupiah at the time of the crisis," Handayani
said.

Now Handayani feels more secure.

"If I lose my job at least I've got the house."

She says she is still "amazed" that she got her dream house in
a such short time, and that the remainder of her savings, which
has doubled, remain substantial.

The crisis has also brought fortune to a foundation for
mentally disabled children in South Jakarta.

The 83-year-old chairwoman was worried about the distressing
currency reports, so she had the treasurer take $1,000 out of the
foundation's deposit account and exchange it into rupiah.

"We had no intention to take advantage of the rush," the
treasurer said, explaining that the $1,000 was money that would
not usually have been exchanged in such circumstances.

"We faced difficulties in raising funds, and we had to pay the
teachers' Idul Fitri allowance," she said.

The decision was taken earlier this month, when the dollar's
selling rate was Rp 6,890.

Thanks to the shrewd chairwoman, all the foundation's teachers
can enjoy their hard-earned Idul Fitri holiday.