Rupiah falls on market players' panic buying

The rupiah plunged to nearly Rp10,500 per dollar in the Jakarta interbank spot market on Monday morning, as market players panicked over the current global financial crisis.

The rupiah was bought to Rp 10,470 per U.S. dollar early on Monday, down 367 points from Rp 9,963 at last weekend's closing.

Market players panicked and bought large amounts of US dollars, following increased pressure on the market amidst the continuing global financial turmoil, financial market observer Edwin Sinaga told Antara on Monday.

Edwin said worries had emerged that the global market condition could worsen, despite the central banks' efforts to jointly inject fresh funds into the money market to ease liquidity.

The efforts had failed to generate a positive effect in the market, he said, considering its diminutive size compared to the global financial crisis.

Edwin believed that the rupiah "will continue to drop" below Rp 10,500 per US dollar.

Edwin said that it would be hard for Bank Indonesia to prevent a further decline, and that it would definitely affect the domestic industrial sector, especially companies that import raw materials.