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Indonesia rupiah weakens in thin early trade

JAKARTA: The Indonesian rupiah lost around two percent in early trade on Wednesday but volume was very thin.

Dealers said players continued to watch the financial health of Bank Indonesia, the country's central bank.

The rupiah IDR was quoted at 7,180/7,230 against the dollar compared with 7,030/7,050 in late trade on Tuesday.

"The market focus remains on the central bank's financial position. But market volume continues to be thin. Even a small move could have a strong impact on the market," one foreign bank dealer said.

A recent audit into Bank Indonesia suggested its financial position was so problematic it might need to be recapitalised.

Finance Minister Bambang Sudibyo has said the government might issue bonds to recapitalise the central bank, selling some of them overseas.

Dealers said the market shrugged off news President Abdurrahman Wahid was expected to reshuffle his two-month old cabinet after the Moslem fasting month of Ramadan ends on Friday.

Palace sources told Reuters nine names had been submitted to Wahid to be replaced, including that of former armed forces chief and current Coordinating Minister for Political and Security Affairs General Wiranto.-Reuters