RUPIAH STRENGTHENS TO NEARLY RP10,000 PER US DOLLAR

Jakarta, July 10 (ANTARA) - The rupiah sharply gained at the Jakarta interbank spot market here on Friday morning, to nearly the level of Rp10,000 per US dollar, as investors actively bought the local currency following the victory of the Susilo Bambang Yudhoyono (SBY)-Boediono pair in the recent presidential poll.

The Indonesian currency traded at Rp10,125-Rp10,135 per US dollar, up 65 points from Rp10,190-Rp10,200 at the market's close a day earlier.

The SBY-Boediono victory gave positive value to the domestic money market, Edwin Sinaga, a money market observer, said here on Friday.

"We are optimistic that the rupiah will continue to surge next week, but there is a possibility that Bank Indonesia (BI) will guard the Indonesian currency at the level of Rp10,000 per US dollar," he said.

According to him, a rapid increase of the rupiah would not be advantageous, especially to exporters who have to recalculate their product value sales.

The position of the local unit at that level was good enough, therefore if BI (the country's central bank) kept on monitoring the rupiah's movements, the money market would stay in a good corridor, he said.

He said the rupiah still had a chance to further strengthen up to the level of Rp9,500 per US dollar, however the upswing should not happen too fast.

Sinaga believed it would be better for the rupiah to be within a range of Rp10,000 to Rp10,200 per US dollar.

Another factor which would help the local currency to surge was the expected bigger foreign capital inflow needed to boost economic growth to five percent, he said.

Indonesia needed foreign investment to grow at seven percent in order to achieve an economic growth rate of five percent, he said.

In the presidential election held on July 8, 2009, SBY-Boediono was expected to win around 60 percent of the vote.