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Indonesia Cancels Plans to Reopen Stock Market Amid Global Financial Turmoil

Indonesia kept its stock market closed for a third consecutive day Friday to stem panic selling as global markets continued to fall over concerns about the U.S. financial crisis. VOA correspondent Nancy-Amelia Collins in Jakarta has more.

The Jakarta Stock Exchange President Erry Firmansyah told reporters plans to reopen the market Friday were shelved to "protect investors and prevent further sharp falls."

Indonesian authorities had planned to reopen the market after a two-day suspension, but shelved the idea after Asian stocks fell Friday morning as traders dumped stocks in favor of cash amid the global uncertainty.

Fuad Rahmani, head of Indonesia's capital market watchdog, says the market might resume trading on Monday.

"We hope we will be better prepared for Monday to open the market…because the market [has] become very irrational, we have to feed the right information to the market so then the market can take decision more rationally on Monday," he said.

Indonesia's benchmark index dropped more than 20 percent this week, driven by the financial turmoil in the United States, and has fallen 47 percent this year.

Late Thursday evening the government announced new measures to safeguard the economy, including easing reserve requirements for commercial banks, making it easier for listed firms to conduct share buybacks, and easing accounting rules on the fair value of assets.

But Helmi Arman, economist at Bank Danamon Indonesia, says the new government measures are unlikely to calm the stock market, the money market, or the banking sector.

"Everybody's got their eyes on what's happening globally. This is more of a global rather than a domestic issue that's driving down the market. The measures that they've taken, for instance, relaxing of market rules and easing of reserve requirements - it's positive, it's better than nothing," he said. "But whether or not it can stop the decline in the market - I think it will do very little, honestly."

Along with plunging Asian markets, Asian currencies were also battered Friday prompting dollar selling intervention in Indonesia, India, and South Korea.