RUPIAH WEAKENS 20 POINTS ON PROFIT TAKING MOVES

Jakarta, June 4 (ANTARA) - The rupiah tumbled against the US dollar in the Jakarta interbank spot market, here, early Thursday, on profit taking moves.

The Indonesian currency traded at Rp10,160-Rp10,170 per US dollar, down 20 points from Rp10,140-Rp10,150 per US dollar at the market's close a day earlier.

The rupiah depreciated because market players wanted to take profit, Kostaman Thayib, director of Banking Retail of PT Bank Mega Tbk, said here on Thursday.

The profit taking was boosted by the rupiah's appreciation which reached the level of Rp10,160 per US dollar recently. Therefore, investors released the local unit to realize profits, he said.

He said the rupiah releasing action by market players was not significant as they were cautious to release the Indonesian currency further, because some positive sentiments still supported the rupiah, such as the increase in the consumer confidence index (CCI), he said.

The CCI climbed 6.3 percent to 89.5 percent in May 2009, and led to the market's positive sentiment. The CCI hike also prevented investors from releasing their shares further, he said.

Thayib believed the rupiah still had a chance to strengthen again to reach nearly the level of Rp10,100 per US dollar. And if there is no obstacle, the Indonesian currency might reach the level of Rp10,000 per US dollar, he said.

However, he hoped that the rupiah would not raise too fast.

Besides, the May inflation rate at 0.04 percent reflected that the domestic economic performance was sound and able to boost foreign investors' confidence in the potential domestic market, he said.

The interest of foreign investors in placing their funds in the domestic market, especially stock market, was getting bigger, bolstering the stock index to reach the level of 2,000 points, he said.