RUPIAH PASSES RP10,000 MARK

Jakarta, June 5 (ANTARA) - The Indonesian rupiah appreciated 115 points at the inter-bank spot market on Friday closing below Rp10,000 against the US dollar.

The rupiah exchange rate was closed at Rp9,940-Rp9,975 against the greenback, up 115 points from the previous close at Rp10,055-Rp10,065.

Retail banking director of PT Bank Mega Tbk, Kostman Thayib, said the rupiah would continue to appreciate due to increasing foreign investors' confidence in Indonesia.

The country's economy which kept growing had made foreign investors put their money in the country's domestic market instead of in other Asian countries, he said.

He said he believed the rupiah exchange rate could reach Rp9,000 per US dollar if the presidential race later in July went smoothly and peacefully.

"We are optimistic with continuing market stability and security the rupiah will keep appreciating below Rp10,000 against the dollar," he said.

Foreign investment is growing larger, enabling state-owned companies to meet their need for dollar to repay their debt and the rupiah to continue to appreciate, he said.

He said foreign players had resumed their activity in the domestic because of the good return they could enjoy moreover the spread between the dollar's interest and the rupiah's was still wide.

He said the country's currency would be more prospective in the future and was predicted to reach below Rp9,000.

The situation is boosted by positive support from the Asian Development Bank that had agreed to extend loan to Indonesia to encourage market players particularly foreign players to buy the rupiah.

He said the inflow of the foreign capital would not open employment because the capital was not invested in real sectors such as factories but for buying securities.

In view of that, he said the foreign capital inflows needed to be continuously checked.

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