RUPIAH STRENGTHENS TO RP10,350 PER US DOLLAR

Jakarta, June 22 (ANTARA) - The rupiah strengthened to Rp10,350 per US dollar at the Jakarta interbank spot market as investors started to purchase the local currency.

The Indonesian currency traded at Rp10,350-Rp10,375 per US dollar, up 50 points from Rp10,400-Rp10,425 per US dollar at the market's close last weekend.

Market players started to buy the rupiah and released the greenback causing the local unit to climb, Rully Nova, a foreign currency analyst of PT Bank Himpunan Saudara Tbk., said here on Monday.

The US dollar selloffs were considered normal after its rallies over the past one week, he said.

The rupiah's' surge occurred after it had slid to nearly Rp10,500 per US dollar, he said.

Some money market analysts had previously predicted the Indonesian currency could plunge to the level of Rp10,500 per US dollar, he said.

According to him, the rupiah actually had a strong chance to move upward again as various economic indicators were believed to be so favorable the currency could reach Rp9,500 per US dollar at the end of the year.

The expectation that the June 2009 inflation rate is expected to be better than the previous month's figure was one of the factors prompting d the rupiah to appreciate, he said.

Another factor was a plan of Bank Indonesia (BI), the country's central bank) to lower its key rate, he said, adding that commercial banks were also expected to cut their interest rates on credits.

"We are optimistic that the rupiah will strengthen again to the level of below Rp10,000 per US dollar because conditions for the local unit are favorable," he said.

Meanwhile, Edwin Sinaga, a money market observer, said the rupiah had continuously weakened over the past one week because its appreciation in the foregoing period had happened too fast.