RUPIAH CONTINUES TO STRENGTHEN ON THURSDAY

Jakarta, Sept. 17 (ANTARA) - The rupiah continued to strengthen in the Jakarta interbank spot market here on Thursday morning as demand for the local currency was high in the runup to the Idul Fitri Islamic festivities.

The local unit traded Rp9,580-Rp9,600 per US dollar, up 110 points from Rp9,690-Rp9,700 per US dollar at the market's close a day earlier.

Another main factor which boosted the rupiah was foreign capital inflow, Farial Anwar, a money market observer, said here on Thursday.

Foreign investors released the US dollar and bought the rupiah to buy small-cap shares at the Indonesian Stock Exchange, he said.

Whether the Indonesian currency would strengthen or weaken, it would be up to the market, especially foreign investors who would take profit when the value was quite high, Anwar, concurrently the director of Currency Management Group, said.

Indonesia's money market could easily be controlled by foreign investors as the country adheres to a free foreign exchange system, he said.

Therefore, it was quite difficult to predict whether or not the local currency could reach the level of nearly Rp9,000 per US dollar, he said.

"We should see whether the rupiah still has a chance to move upward again or conversely to fall sharply," he said.

Meanwhile, the Composite Stock Price Index (IHSG) at the Indonesian Stock Exchange (BEI) here on Thursday morning got off to a strong start as investors bought small-cap shares, especially those of banks.

The BEI index went up 22.791 points or 0.91 percent to 2,460.85 points, and the LQ-45 index jumped 5.623 points or 1.18 percent to 482.151 points.