Jakarta - The rupiah's exchange rate against the dollar slightly fell in the Jakarta interbank spot market on Tuesday morning as investors were worried about widespread student rallies against the government's plan to raise fuel prices.

"Investors were worried about continued student protests. That's why most of them refrained from making transactions in view of  uncomfortable situations," money market observer Edwin Sinaga said on Tuesday.

The rupiah which traded at Rp9,200 per dollar the day before gradually weakened to more than Rp9,250 per dollar on Tuesday morning, he said.

The surge in global crude prices was the main factor causing the rupiah to edge closer to Rp9,300 per dollar, he said.

The rupiah would likely move farther from Rp9,300 per dollar if the government pushed through the plan to raise fuel prices, he said.

"We believe the negative market pressure will increasingly become stronger because of the expected high monthly inflation rate in May," he said.

He said the rupiah's current exchange rate against the dollar was quite safe as it was far below Rp9,300 per dollar as investors were still careful in buying up the dollar.

What was more, the global crude prices was now stable at US$124 a barrel after China, the world's second largest oil importer after the United States, had slashed its demand for crude oil, he said.

 - Source : Antara News Agency, 13 May 2008