Rupiah Closes Stronger, Index Down

Jakarta, Oct 7 (Antara) - Indonesia`s benchmark stock index closed lower to follow the regional trend, analysts said here on Monday. The index of the Indonesian Stock Exchange (BEI) fell 0.33 percent to 4,374.96 points with index of 45 most liquid stocks down 0.21 percent to 731.39 points. Panin Sekuritas` analyst Purwoko Sartono said the majority of markets in Asia recorded a decline in index with investors awaiting the result of US budget debate. Now US government shutdown has entered the fourth day on failure to reach a budget agreement between the US government and the Congress. "Investors, however, believed the shutdown would end shortly that the impact on the economy would be limited. The Federal Reserve Bank of San Francisco estimated if the shutdown would go on for two weeks the US economy growth would be slashed by 0.25 percent in the fourth quarters," he said. Meanwhile, local investors are also awaiting data of foreign exchange reserves to be announced this week. In Monday trading, there were 110,989 transaction at the BEI with 3.062 billion shares valued at Rp3.236 trillion. Decliners outpaced gainers by 159 to 88 with 112 shares flat. Regional markets such as Hang Seng recorded a 0.71 percent fall in index to 22,973.95 points with Nikkei-225 index shrinking 1.22 percent to 13,853.32 points and that of Straits Times down 0.10 percent to 3,135.64 points. Meanwhile, the national currency rupiah closed stronger against the US dollar on Monday. Rupiah in interbank transaction traded at 11,205 gaining from the previous level of 11,316 per dollar. "The US dollar was under pressure again facing the majority currencies in the world including rupiah with the deadlock in negotiations over US government`s proposal to raise the country`s debt ceiling," chief researcher of Monex Investindo Futures, Ariston Tjendra said. Ariston said if the United States failed to raise its debt ceiling by Oct 17, the US economic recovery would be hampered, therefore, the plan to phase out quantitative easing would most likely be postponed. World Bank economist for Indonesia Ndiame Diop said the rupiah value would remain volatile with the country`s current account deficit. "The rupiah value is still volatile as it depends on the current account condition. The currency would gain strength if the current account deficit continue to diminish," Diop said. He said he hoped the Indonesian government would immediately sort out the problem to create sustainable growth.