RUPIAH FALLS TO OVER RP10,500 PER US DOLLAR EARLY TUESDAY

Jakarta, June 23 (ANTARA) - The rupiah sharply tumbled at the Jakarta interbank spot market here early Tuesday, passing the level of Rp10,500 per US dollar, as investors actively purchased the greenback.

The Indonesian currency traded at Rp10,530-Rp10,550 per US dollar, down 80 points from Rp10,450-Rp10,470 per US dollar at the market's close a day earlier.

The local unit's significant fall was not expected before, Edwin Sinaga, president director of PT Finan Corpindo Nusa, said here on Tuesday.

Because Bank Indonesia (BI) had been expected to intervene into the domestic money market in order to boost the rupiah to the level of below Rp10,500 per US dollar, he said.

Besides, investors in morning trading session usually bought the greenback in large amount which could pressure the rupiah to be above the level of Rp10,500 per US dollar, he said.

The local currency's exchange rate at Rp10,530 per US dollar was also due to a panic in the market after the global economic performance did not improve, and even tended to be under pressure, he said.

However, Sinaga believed that the rupiah should have not tumbled to the level of above Rp10,500 per US dollar. If BI released US dollars, the rupiah was expected to strengthen again to the level of below Rp10,5000 per US dollar, he said.

But BI's policy sometimes proves not to be what analysts' had expected, he said. It was possible that BI would do nothing but monitor the market further and it would consider taking action only after the negative issue was over, he said.

He believed the Indonesian currency still had a chance to gain again if the implementation of the upcoming presidential election was smooth.

"We believe a smooth implementation of the presidential poll will be able to boost the rupiah again," he said.

Indonesia is scheduled to hold its second direct presidential election on July 8, 2009.