INDONESIA'S PT TELECOM(TLK) Message Board

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Technology Stocks : INDONESIA'S PT TELECOM(TLK)

TLK 20.95

+1.8%

Nov 14 9:30 AM EST

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To: Tony van Werkhooven who wrote (290)	2/10/1998 7:58:00 AM
From: tom	Read Replies (1) of 947

The hedge funds/fx markets think that there will be currency board in Indonesia and it will be set at 5000-5500 Rp/US$. The hedge funds are buying Rupiah at 7500 and hope to sell it back to the central bank at 5000 or 5500. They then will try and attack the board as they do not think it will be sustainable (a bit like EMU). Indo will undoubtedly introduce capital controls in order to try and stop speculation but this is rarely effective. Stan Fischer of the IMF thinks that a currency board is appropriate for Indo. Estimates for what interest rates will need to be to stop a dollarisation of the economy are around 200-300%. If it did happen then I think it would be very positive for Indonesia but I am not sure that Suharto/Central Bank are willing to hand monetary policy over to Greenspan and have their only method of propping up the bankrupt banking system removed.

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