Diplomatic sources said the trip had been planned for some time. The calmer situation in Medan failed to offer respite to Indonesia's much battered rupiah, which dropped to its lowest since mid-March on fears of further instability, forcing the central bank to hike key interest rates to defend the currency. The rupiah fell to 10,000 against the dollar before rebounding to 9,500 by late afternoon after the rate rises. Indonesia's top economics minister Ginandjar Kartasasmita told Reuters he expected the effects of the Medan riots on the economy to be short lived, and told speculators they would be badly burned by a rising rupiah. But dealers were skeptical.
People are very nervous as to whether the government has control over the whole situation.
Markets elsewhere in the region were also spooked by fears of increased violence in Indonesia, which straddles international sea and air routes and has vast market potential. Stock markets in Singapore, Malaysia and Taiwan all fell on concerns about the impact of a social explosion in Indonesia. Despite Wiranto's assertion of no deaths in the Medan riots, local reports said at least two people had been shot dead by security forces and four burned to death in blazing buildings. Reuters correspondents in Medan saw plainclothes security officials firing into a crowd during the riots Wednesday. A plainclothes security official held a gun to the head of a Reuters Television cameraman, before firing into the air and pushing him over a wall into a ditch.