RUPIAH DROPS SHARPLY EARLY MONDAY

Jakarta, Feb. 2 (ANTARA) - The rupiah dropped sharply against the US dollar in the Jakarta interbank spot market here on Monday as market players continued to buy the greenback.

The Indonesian currency traded at Rp11,790/12,010 per US dollar, down 414 points from Rp11,376/11,400 at the market's close at the weekend (Friday, Jan 30).
Edwin Sinaga, a money market analyst, said here on Monday the publics lack of confidence in the rupiah had caused the local currency to tumble.
The government's planned stimulus package worth Tp71.2 trillion to boost national economic growth would be discussed today in the House of Representatives (DPR), he said.
The Indonesian currency was under pressure due to polemics on the planned stimulus package, he said.
The government was also seeking new loans, including from abroad, and issuing both local and external bonds to finance new projects in order to lower the unemployment rate, he said.
Market players also tended to prefer the greenback, especially because US dollar supply in the domestic market had dropped as some investors had withdrawn their funds to reinvest them in their own countries, he said.
"We are optimistic the rupiah's present rate will undergo some corrections because the negative sentiment pressuring the market is still high," he said.
However, he expected Bank Indonesia (BI, the central bank) to intervene in the market and release dollars from its foreign exchange reserves to prevent the rupiah from falling to the level of Rp12,000.