RUPIAH PLUNGES TO NEARLY RP10,300 PER US DOLLAR

Jakarta, June 18 (ANTARA) - The rupiah tumbled against the US dollar in the Jakarta interbank spot market here on Thursday morning to nearly Rp10,300 per US dollar on increased demand for the greenback from corporations, especially state companies (BUMNs), facing maturing debts.

The Indonesian currency traded at Rp10,270-Rp10,285 per US dollar, down 20 points from Rp10,250-Rp10,265 at the market's close a day earlier.

The rupiah's depreciation continued as investors kept on buying the greenback to meet their needs, Rully Nova, a foreign currency analyst of PT Bank Himpunan Saudara Tbk, said.

"We predict the rupiah will reach the level of Rp10,300 per US dollar as demand for the greenback is continuing," he said.

He said the market was negative towards the rupiah, especially due to the absence of significant internal issues, while the global market tended to be negative following the weakening of world bourses.

Therefore, the local unit might fall further in the afternoon, as the domestic money market's negative sentiments lingered on, he said.

However, the rupiah still had a chance to strengthen again, as some market players 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 June inflation rate expected to be better than the previous month's, he said.

Besides, investors also waited for the banking sector to soon cut its credit interest rate in order to boost national economic growth, he said.

The improvement in domestic economic growth would encourage foreign investors who considered Indonesia as a more profitable market than those in other Asian countries, he said.

"We are optimistic foreign investors will be more active in investing their funds in the domestic market, as they see that the rupiah interest rate is higher than that of the US dollar," he said.

He said the rupiah depreciated due to profit taking moves after the local currency rallied significantly over the past few days.