RUPIAH WEAKENS AGAINST US DOLLAR EARLY MONDAY

Jakarta, May 26 (ANTARA) - The rupiah weakened against the US dollar in the Jakarta interbank spot market here early Monday on market players' profit-taking moves.

The Indonesian currency traded at Rp10,280-Rp10,290 per US dollar, down 20 points from Rp10,260-Rp10,270 per US dollar at the market's close a day earlier.

Investors released the local currency as they were worried about the political situation which was marked by increasing tensions in the run up to the upcoming presidential and vice presidential election, Kostaman Thayib, a retail banking director of PT Bank Mega Tbk, said here on Monday.

Market players were also concerned about US economic growth which was reported to have improved while the US government up to now had yet to confirm whether it would take over the General Motor automotive industry which had gone bankrupt, he said.

Such a condition encouraged investors to release the rupiah which had significantly strengthened over the past week, he said.

But the amount of rupiahs release was not significant as market players were still cautious of releasing more of the Indonesian currency, he said.

He believed the rupiah still had a chance to move upward again. So the rupiah's depreciation this morning was temporary, and it most likely would rebound to nearly the level of Rp10,200 per US dollar, he said.

If the local unit continued to strengthen, it could reach the level of Rp10,000 per US dollar in the next two months, he said.