RUPIAH DROPS 31 POINTS EARLY THURSDAY

Jakarta, Feb. 26 (ANTARA) - The rupiah weakened against the US dollar in the Jakarta interbank spot market early Thursday to over Rp12,000 per US dollar on high demand for the greenback which had advanced in regional money markets.

The US dollar strengthened against the Euro and Yen in the regional markers as investors bought the greenback which they considered safe to keep, Kostaman Thayib, retail banking director of PT Bank Mega Tbk., said here on Thursday.
The rupiah traded at Rp12,036/12,056 per US dollar, down 31 points from Rp12,005/12,015 at the market's close a day earlier.
At that level, the local currency was considered to be in a stable position and giving no reason for worry because Bank Indonesia (BI) would continue to protect it, he said.
The Indonesian currency still had a chance to gain, as domestic and foreign capital was expected to enter the market, especially when the upcoming general elections could proceed peacefully and smoothly, he said.
Indonesia, which would get additional foreign exchange reserve funds under an agreement reached in the recent ASEAN+3 (China, Japan and South Korea) Meeting, would protect the rupiah from sliding down further, he said.
According to the Action Plan to Restore Economic and Financial Stability of the Asian Region agreed on by ASEAN+3 finance ministers in their meeting in Phuket, Thailand, on Sunday (Feb. 22), 120 billion US dollars, instead of 80 billion US dollars as initially proposed, would be injected into an ASEAN reserve pool.
"We are sure that the additional funds will be very helpful for BI when the central bank needs to intervene in the domestic money market," he said.
He also expressed optimism that the rupiah would strengthen to below Rp12,000 per US dollar when BI intervened in the money market.