RUPIAH WEAKENS TO NEARLY RP10,200 PER DOLLAR

Jakarta, June 16 (ANTARA) - The rupiah's value tumbled to nearly Rp10,200 per US dollar in the Jakarta interbank spot market on Tuesday morning on increased demand for the greenback from corporations especially state companies (BUMNs) to pay their maturing debts.

The Indonesian currency traded at Rp10,185-Rp10,195 per US dollar, down 75 points from Rp10,110-Rp10,125 at the market's close a day earlier.

The local unit during June was expected to fluctuate but its position would remain at between Rp10,000 and Rp10,200 per US dollar, Eric Sugandi, an observer of the domestic money market, said here early Tuesday.

"We are optimistic the rupiah will strengthen again in the near future, in the runup to the presidential election scheduled for July 8 this year," he said.

Besides, he said, the absence of significant issues both in the local and international markets, had made it difficult for the rupiah to strengthen to e below the level of Rp10,000 per US dollar.

However, he predicted that Bank Indonesia (BI) would intervene in the market to prevent the currency from depreciating to more than Rp10,200 per US dollar.

He said BI, the country's central bank, would guard the rupiah not to pass the level of Rp10,200 per US dollar because it could cause the rupiah to further plunge.

Moreover. BI's foreign exchange reserves had now increased to US$60 billion, he said.

Investors tended to take a 'wait-and-see' stance towards market developments while they were waiting for a report from the Central Bureau of Statistics (BPS) on the inflation rate and the implementation of the presidential election.

Indonesia will hold its second direct presidential election on July 8, 2009. The General Elections Commission (KPU) has set schedules for closed-door campaigning from June 2 to 10, and mass rallies from June 11 to July 4, 2009.

"We predict that the rupiah will strengthen again as it will be boosted by internal issues," he said.