Rupiah hits new lows on protest fears

Currency dives to a two-year low of 12,300 against the US dollar, ahead of expected street clashes on Sunday.

Indonesia’s shaky currency hit fresh lows yesterday amid political uncertainty and fears that expected protests against President Abdurrahman Wahid could turn violent.

The rupiah hit 12,300 against the US dollar in early trading, the lowest since September 1998.

Analysts said that the delay in loans from the International Monetary Fund (IMF) and other major creditors last week appeared to have triggered the rupiah’s nosedive.

But nascent political turmoil in the country was pushing it to an even lower level, despite efforts by the central bank to defend the Indonesian currency through intervention and interest-rate hikes.

As Mr Abdurrahman’s enemies continued to plot his downfall, the President’s die-hard supporters and thousands of others opposed to them made the capital increasingly nervous.

About 200,000 members of the Nadhlatul Ulama are expected to gather in Jakarta on Sunday, ahead of a parliamentary session the following day that could result in a second damning censure against the President.

This could trigger street violence.

Police said yesterday that they would shoot on sight protesters who try to disrupt the censure vote on Monday.

Military sources told The Straits Times that the armed forces (TNI) and the police had drawn up contingency plans in the event of major violence in the capital. But they felt that a major implosion was unlikely.

Said a high-ranking intelligence source: “There will be some blood on the streets, which is how political problems are usually resolved in this country. But a lot of what is going on is psychological warfare.

“If anything does happen, it is likely to be on a small scale. We expect fewer than 100 casualties, maybe even fewer … It could end up being an anti-climax.”

But he noted that revenge attacks for “freak accidents” and provocation could force the situation to spiral out of control. Either way, Mr Abdurrahman looks set to be a big loser, his credibility among legislators and the public crashing, like the rupiah, to its lowest level.

The influential military yesterday looked set to join other factions to issue a second memorandum. The only condition the generals listed was they would not be the first to fire the salvo against the President on Monday.

A TNI general noted: “We have to listen to the aspirations of the people. We sense that many Indonesians no longer want him in office. If the largest factions in Parliament want to censure him, we have no choice but to follow them.”

Vice-President Megawati Sukarnoputri continued to send strong signals that she would do nothing to resuscitate his grip on power.

For a second day running, she did not show up for the Cabinet meeting nor did she meet the President for their normal breakfast discussion.

Mr Abdurrahman, however, continued to stand defiant, brushing aside any suggestion of him stepping down.

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