Rupiah Sinks Lower In Value Against Dollar

Jakarta, Sept 19 (ANTARA) - The Indonesian currency rupiah dived lower against the US dollar losing more value in the opening trade on Wednesday on worries about protracted Spanish debt crisis. Rupiah traded at 9,539 to the dollar in inter-bank transactions this morning falling in value from earlier level of 9,507 . Rupiah lost more of its value on growing uncertainties in Spain prompting profit taking in the market, Ariston Tjendra, the chief researcher of Monex Investindo Futures, said here on Wednesday. Ariston said the pressure on Spain to look for bailout fund is growing after the yield of its 10-year bond rose to more than 6 percent. However, a number of analysts doubted that Spanish bailout would have positive effects on risky currencies including rupiah as financial aid requires spending cut which would be an economic burden for Spain, he said. "Fiscal tightening is clearly not a solution to problem faced by Spain which has unemployment rate of 25 percent and growing non performing housing credits," he said. Meanwhile, Milenium Danatama Sekuritas analyst Abidin said the Japan-China territorial dispute would add to the negative sentiments from Europe faced by investors in the regional markets. The conflict will bring risk to the market discouraging investors from putting their money in the Asia Pacific market, Abidin said. He said the new conflict contributed to weakening risky currencies in the region, and it is feared to drag on posing a negative sentiment for a long time. He noted the euphoria of The Fed`s quantitative easing last week had been almost over prompting profit taking in the market.