They said several overnight deals were recorded for July shipment from Medan and Palembang at 24.75 US cents and 25.00 US cents respectively.

"The market is closely watching the rupiah's movement. The rupiah's upward trend over the past few days has triggered a rush of buying," said one trader in Padang, West Sumatra.

But other traders are more sceptical about the upbeat mood.

"The market has been busier but there are more buyers out there who have been staying on the sidelines because they expect the dollars to retreat," said one trader in Jakarta.

Prices for July shipment were quoted at 25.50 US cents/lbin Medan, in Palembang prices stand at 25.00 US cents and in Padang prices stayed stable at 24.75 US Cents/lb.

On Tuesday morning the rupiah slipped back to 8,000/8,030 against the dollar compared with 7,880/7,980 on Mondayafternoon.

Currency dealers said the rupiah softened as offshore players bought dollars after a recent fall on the back of weakness in other regional currencies.