RUPIAH UP 16 POINTS TO RP9,805 PER DOLLAR LATE FRIDAY

Jakarta, Oct 17 (ANTARA) - The rupiah strengthened against the dollar in the Jakarta interbank spot market late Friday after the government stated it would provide banks and non-bank financial institutions with financial support.
The rupiah closed at Rp9,805/9,810 per dollar late Friday from Rp9,821/9,875 per dollar the day before, up 16 points.
Foreign currency analyst Rully Nova of PT Bank Himpunan Saudara Tbk said the rupiah strengthened late Friday thanks to the government's statement which sent a positive sentiment to the market.
But the sentiment tended to fade in the evening, causing the rupiah's appreciation against the greenback to slow slightly, he said.
He said investors were optimistic that the government would be very serious about controlling the money and share markets to enable them to rebound.
"The government's statement has shored up foreign investors' confidence in the domestic market," he said.
He said the government's policy aimed at preserving the stability of the banking and financial sectors was proving correct in anticipating the impact of the global financial crisis.
The government had done its best, he said adding a downturn in the financial sector was normally not only caused by foreign factors but also by a lack of confidence in the domestic market.
He said the government must continue its current policy to preserve the stability of the monetary sector while at the same time encouraging the real sector and attracting investors to invest in the country.
"In the next two years the world will be full of sharp competition to get capital due to a downturn in credit growth," he said.
He expressed his belief the local unit would strengthen again next week as investors would likely release the greenback after it had sharply appreciated against other major currencies.
The dollar strengthened against the euro on concern the recent financial meltdown would lead to a recession in the US and Europe.