RUPIAH SURGES FAR BEYOND RP10,000 PER US DOLLAR

Jakarta, July 24 (ANTARA) - The rupiah surged against the US dollar in the Jakarta interbank spot market on Friday afternoon, moving far from the level of Rp10,000 per US dollar as investors continued to buy the local currency.

"The rupiah purchases by investors caused the rupiah to climb far beyond the Rp10,000 per US dollar level," Edwin Sinaga, a domestic money market observer, said here Friday.

The Indonesian currency traded at Rp9,983-Rp10,000 per US dollar, up 45 points from Rp10,028-Rp10,035 per US dollar at the market's close a day earlier.

Investors' optimism about the local unit has increased as Indonesia's economy is growing soundly, according to Edwin Sinaga, concurrently president director of PT Finan Corpindo.

They believe that they could make better profits in Indonesia rather than in other countries in the region, he said.

"We are optimistic that the rupiah will continue to strengthen far beyond the Rp10,000 per US dollar level but it is unclear whether Bank Indonesia (BI) is to intervene in the market to prevent the local unit from appreciating too rapidly," he said.

According to him, BI, the country's central market, would likely enter the domestic money market to halt the rupiah's strengthening movement because it could disadvantage the country's exports.

Meanwhile, another money market observer, Farial Anwar, said that the Indonesian currency could have surges to the level of Rp9,500 per US dollar but the surge was halted.

Anwar said the rupiah's exchange rate in January 2008 was Rp9,300 per US dollar, so the local currency should not be allowed to reach that level again now.

"We are optimistic that BI will change its strategy to let the rupiah move upward further as long as the market's positive sentiment lasts," he said.