Worries Fuel Drop In Rupiah Indonesian Currency Hits New Low As Crisis Deepens

Indonesia’s troubled currency plunged to a new all-time low Wednesday amid anxiety over President Suharto’s apparent choice for vice president - a technology minister with a taste for expensive projects.

After the markets closed, Suharto enacted a first wave of sweeping economic reforms to end the subsidies, monopolies and other privileges that had benefited a wealthy circle of his family and friends.

At one point, the rupiah crashed to 11,950 against the U.S. dollar, well below its Tuesday close of 9,750. It closed Wednesday at 11,550, down more than 80 percent since July.

The plunge was largely fueled by speculation that Suharto might pick a longtime friend, controversial Research and Technology Minister Bacharuddin Jusuf Habibie, to be his next vice president.

The 76-year-old Suharto decided Tuesday to stand for a seventh, consecutive five-year term in March, when a 1,000-member assembly dominated by his supporters is to hold a presidential election that he is almost certain to win.

But due to Suharto’s age and concerns about his health, some analysts believe the next vice president will one day fill Suharto’s shoes as leader of the world’s fourth-most populous nation.

Habibie is an unpopular choice in some business circles because he has pursued many costly, high-tech projects, several of which are to be shelved under conditions of a $40 million International Monetary Fund bailout.

That may put Habibie’s commitment to economic reforms in question, said Manmindar Singh, a senior economist with the Nomura Research Institute in Singapore.

“There’s no doubt the issue of succession is coming into play as a major issue,” Singh said.

The Jakarta Stock Exchange’s main Index closed up 4 percent at 466 points as foreign investors bought blue-chip shares cheaply.