RUPIAH SURGES AGAINST US DOLLAR EARLY MONDAY

Jakarta, Aug. 3 (ANTARA) - The rupiah surged against the US dollar in the Jakarta interbank spot market here early Monday as investors continued to buy the local unit.

The Indonesian currency traded at Rp9,890-Rp9,900 per US dollar, up 30 points from Rp9,920-Rp9,935 at the market's close over last weekend.

The rupiah gained because investors were still optimistic about the Indonesian market, bolstering foreign investments in the domestic market, Edwin Sinaga, a domestic money market observer, said here on Monday morning.

The successful presidential election last July 8, in just one round, had generated a positive sentiment in the domestic market, he said.

The rupiah, according to him, would remain at the level of between Rp9,800 and Rp9,900 per US dollar as its surge was likely to be restricted, because Bank Indonesia (BI, the central bank) would stay in the market to prevent the local currency from strengthening too rapidly, he said.

The favorable market condition would give a chance to the Indonesian currency to reach the level of Rp9,500 per US dollar at the end of this year, he said.

Although it would not be easy to reach the level of Rp9,500 per US dollar, the rupiah had a big chance to move upward, he said.

Investors also focused their attention on the Draft 2010 State Budget presented by President Susilo Bambang Yudhoyono in his state address introducing the government's financial note before the Parliament Monday, he said.

Investors were also optimistic that the country's economic growth would be better next year than this year's growth, he added.

Their optimism was based on the improvement of the level of foreign investments in the domestic market which in long term could create more job opportunities and cut the unemployment rate, he explained.

"We believe the economy will grow better, prompting the rupiah's exchange rate to move into a more profitable position," he said.