RUPIAH TUMBLES AGAINST US DOLLAR EARLY WEDNESDAY

Jakarta, June 17 (ANTARA) - The rupiah continued to weaken at the Jakarta interbank spot market early Wednesday, on regional bourse setbacks.

The Indonesian currency traded at Rp10,230-Rp10,245 per US dollar, down 55 points from Rp10,175-Rp10,195 at the market's close a day earlier.

The rupiah's had depreciated over the past few days, causing it to pass the psychological level of above Rp10,200 per US dollar, Kostaman Thayib, retail banking director of PT Bank Mega Tbk, said here on Wednesday.

"We predict the rupiah will further plunge due to the market pressure's negative sentiment," he said.

He said the local unit indeed was rather under the market pressure because of the global negative issue, but it would be difficult for the rupiah to reach the level of Rp10,500 per US dollar.

The rupiah had been earlier expected to tumble to the level of nearly Rp10,500 per US dollar, he said.

However, he believed that despite the market pressure, the local currency still had a big chance to climb again.

"We are optimistic that the rupiah still has a chance to move upward again. If the implementation of the upcoming presidential elections is smooth, foreign investors will have confidence to enter the domestic market," he said.
Meanwhile, Farial Anwar, an observer of the domestic money market, said the rupiah's fluctuation against the US dollar over the past one week, has made the business community and the public confused and caused a negative impact.

"That condition has made the public and business community confused as the rupiah is so fluctuating and it's considered disadvantageous," he said.

That phenomena was expected to continue and would never stop because Indonesia has followed a system of free floating exchange rate, he said, hoping that the government would change the system introduced by the International Monetary Fund (IMF), into a controlled exchange rate system.