RUPIAH CONTINUES TO WEAKEN AGAINST US DOLLAR

Jakarta, Aug. 20 (ANTARA) - The rupiah weakened further against the US dollar in the Jakarta interbank spot market here early Thursday as investors continued to hunt the greenback to buy US government bonds.

The Indonesian currency traded at Rp10,100-Rp10,125 per US dollar, down 30 points from Rp10,080-Rp10,100 per US dollar at the market's close a day earlier.

The bonds offered by the US government got positive responses from the market, causing the rupiah to come under pressure in the domestic money market, Edwin Sinaga, a money market observer, said here on Thursday.

But he believed the local currency would strengthen again because regional bourses were improving, as the Indonesian bourse and Wall Street bourse indexes had gained.

However, the bonds being offered by the US government were more attractive for foreign investors who decided to release the rupiah and buy the greenback for purchasing the bonds, he said.

The investors' positive response indicated that the US economic growth would grow better, he said.

He believed, however, that the rupiah still had a chance to move upward further and was expected to reach the level of Rp9,500 per US dollar at the end of this year.

The rupiah's depreciation was temporary and it would gain again when foreign investors returned to the domestic money market, he said.

Investors still considered Indonesia as a potential market to invest, although right now they focused their attention to the bonds offered by the US government, he said.