May 16 15:25

Rupiah weakens significantly on Tuesday

Jakarta (Antara News) - The rupiah exchange rate against the US dollar decreased to Rp9,200/9,210 in the spot market here Tuesday morning, dwindling by 205 points from Rp8,895/8.900 when the Indonesian currency was traded on Monday.

"The market was dominated by significant rupiah`s selling on Tuesday so that the currency continued to become weak," Bank Saudara firm`s foreign exchange analyst Yusuf said here Tuesday.

Yusuf said the selling of the rupiah was attributed to many factors including pros and cons about former president Soeharto`s legal case and the tumbling of stock markets in Asian and European regions.

Attorney General Abdul Rahman Saleh announced on Friday the corruption charges against Soeharto, who was accused of embezzling some US$419 million and Rp1.3 trillion (YS$150 million) in public money, were being dropped due to the former president`s poor health.

Human rights activists and anticorruption campaigners, however, flatly rejected the decision.

Yusuf said the rupiah should have been continually rebound against the greenback since international market still showed a positive sentiment and the weakening of the US dollar against yen and euro.

Bank Indonesia (BI) or the central bank governor Burhanuddin Abdullah said internal market dynamics and other factors from foreign markets led to the weakening of the rupiah.

He said the central bank would monitor the rupiah`s dynamics in order to avoid long-term tendency.

Last Wednesday the rupiah reached a two-year high of Rp8,726 after a gain of 12.7 percent this year. (*)
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