Rupiah slightly weakens late Thursday

The rupiah was slightly down against the US dollar in the Jakarta interbank spot market on Thursday afternoon.

The Indonesian currency traded at Rp11,325/11,335 per US dollar, down 15 points from Rp11,305/11,330 per US dollar earlier.

The rupiah`s depreciation was quite small thanks to Bank Indonesia (BI)`s intervention in the domestic money market, Rully Nova, a foreign exchange analyst of PT Bank Himpunan Saudara, said here on Thursday.

The country`s central bank also closely monitored trading activities of foreign currencies especially in foreign banks, he said.

Nova said that market`s activities in the afternoon were not much different from those in the morning because market players still focused their attention on the government`s planned stimulus package amounting to Rp71.5 trillion to boost the national economic growth.

The government planned to increase the funds of the economic stimulus package from Rp10.2 trillion to Rp71.5 trillion to push the real sector and deal with the impacts of the current global economic crisis, he said.

The economic stimulus package was expected to help boost the people`s purchasing power and reduce the number of worker lay-offs.

However, market players were not too optimistic about the stimulus package because the global crisis got worse and the Indonesian exports in January 2009 dropped significantly, he said.

BI intervened the domestic money market to prevent the local currency from slumping down further, he said.

The market seemed to be fluctuating, but BI`s intervention by releasing the foreign exchange reserves in the market was expected to improve the market`s activities, he said.

The rupiah tended to be under pressure because the supply of the US dollars in the market decreased, after foreign investors took the greenback to their home countries, he said.

Foreign investors preferred to take the US dollars to the United States, for instance, because the US needed fresh funds to help boost its economic growth and curb the global financial crisis, which was getting worse, he said.