BI DENIES ITS INTERVENTION PLAYS MORE DOMINANT ROLE IN RUPIAH'S RISE

Jakarta, July 15 (ANTARA) - Bank Indonesia (the central bank/BI) has denied an allegation that its market intervention is playing a more dominant role than a capital inflow in strengthening the rupiah's exchange rate against the dollar.

"Who knows better, the market or me?" BI Senior Deputy Governor Miranda Swaray Goeltom said after a meeting at the Trade Ministry here on Tuesday.

Miranda said the central bank would be pleased if the rupiah's strengthening was the result of a capital inflow rather than by its monetary policies.

"Frankly speaking, we find foreign investors still flowing into the country because of their confidence in our stable economy. And we must try to keep them investing here," she said.

The rupiah strengthened to a three-month high of 9,159 per dollar last Friday.

Since early this week, the local unit has edged closer to Rp9,100 per dollar in the Jakarta interbank spot market.

BI Governor Boediono said last week investment picked up in the second quarter of 2008, as recorded in the central bank's balance of payments, contributing to the rupiah's strengthening.

The government expects the rupiah to trade at between Rp9,000 and Rp9,200 per dollar this year.