RUPIAH FALLS TO NEARLY RP10,500 PER US DOLLAR

Jakarta, June 19 (ANTARA) - The rupiah sharply fell to nearly Rp10,500 per US dollar on investors' worries on possible nuclear war after North Korea had threatened the United States.

The Indonesian currency traded at Rp10,460-Rp10,475 per US dollar, down 115 points from Rp10,345-Rp10,355 per US dollar.

North Korea's threat had prompted investors to buy the US greenback in the money market, bolstering the foreign currency's value to climb, Edwin Sinaga, domestic money market observer, said here on Friday.

However, he believed that the worry was just an instant panic and would not last long.

The rupiah had actually earlier strengthened to Rp10,325 per US dollar or up 30 points, but the position did not last long as investors bought the US dollar in large amount, he said.

Besides, the national economic growth had not moved forward and was only supported by the consumption sector, he said.

Therefore, investors took profit after the rupiah had rallied in the past. The rupiah sell-offs caused the local unit to plunge.

"We are optimistic that the rupiah still has a chance to strengthen if the tension between North Korea and the US is cooling down," he said.

Meanwhile, Anton Gunawan, an economic observer, the indication of the rupiah's fall around June was normal and temporary in nature.

"If there is no indication of negative new, the rupiah will probably surge again at the end of this year," he said.

He predicted that the rupiah would again move upward up to Rp9,800 per US dollar at this closing year, and the general election factor was expected to help trigger positive sentiment when the security condition is conducive after the implementation of the upcoming presidential elections.

"We are optimistic that the rupiah still has a chance (to strengthen) if the implementation of the presidential election is smooth, as it could boost foreign investors' confidence in entering the domestic market," he said.