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Jakartapost
The
rupiah plunged early on Tuesday to beyond 11,000
per U.S. dollar, reaching the lowest level in
three months, but managed to strengthen late
in the afternoon amid rumors of Bank Indonesia
intervention and profit taking. The local currency
ended higher at 10,835 compared to 10,940 on
Monday. Dealers said that corporate dollar demand
and a slew of bad news for the economy had caused
the rupiah to be under strong pressure.
Dealers said that the central bank was believed
to have sold around US$20 million to avoid further
depreciation in the local unit. But the country's
bleak economic outlook would continue to cloud
the rupiah, dealers said. The World Bank criticized
the government on Monday for the lack of progress
in implementing key economic reform programs
particularly in the field of privatization and
asset sales.
The
snags in the planned sale of state-owned cement
producer PT Semen Gresik to Mexican cement giant
Cemex SA de CV had also created concerns among
foreign investors. Late last week international
rating agency Standard & Poor's cut the country's
sovereign credit rating from CCC+ to CCC with
a negative outlook.
The
rupiah has been weakening since the middle of
August amid growing pessimism toward the administration
of President Megawati Soekarnoputri particularly
in the implementation of economic reform programs.
The rupiah strengthened to around 8,200 when
Megawati assumed power late in July from around
11,000 during the administration of former president
Abdurrahman Wahid. --JP
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