BI refuses to weaken rupiah to boost exports<\/p>\n
Leony Aurora, The Jakarta Post, Jakarta<\/p>\n
Bank Indonesia (BI) has refused to intervene in the foreign
\nexchange market and weigh in on the rupiah performance against
\nthe U.S. dollar to boost exports in spite of calls from local
\nbusiness players.<\/p>\n
Speaking at an Indonesian Chamber of Commerce and Industry
\n(Kadin) business forum on Wednesday, BI governor Burhanuddin
\nAbdullah said that exports should be increased through efficiency
\nin the country's manufacturing sector.<\/p>\n
\"Let's postpone the idea of disturbing rupiah to boost
\nexports,\" he said in the opening session of the second day of the
\ntwo-day forum.<\/p>\n
Indonesia is in desperate need for an increase in exports to
\naccelerate its economic growth, particularly as investment has
\nremained weak due to various uncertainties both at home and
\noverseas. The economic growth has been mainly driven by domestic
\nconsumption.<\/p>\n
Although last year's exports increased by 5.2 percent to US$61
\nbillion from $57.2 billion in 2002, many experts believe that the
\nfigure could have gone higher had the rupiah not appreciated vis
\na vis the sliding greenback last year.<\/p>\n
The local unit now stands at around Rp 8,400 per U.S. dollar,
\nabout 6 percent stronger than its rate a year ago at Rp 8,900 per
\nU.S. dollar. It was one of the best performing currencies in the
\nregion last year. The strengthening in the rupiah has been a
\nmajor factor behind the overall stability in several of the
\ncountry's key macroeconomic indicators.<\/p>\n
A sharp appreciation in the value of the rupiah can make
\nIndonesian exports more expensive overseas, particularly compared
\nto those coming from countries whose currencies are not
\nappreciating as quickly as the rupiah.<\/p>\n
Meanwhile, State Minister of State Enterprises Laksamana
\nSukardi said that to improve the competitiveness of Indonesia's
\nbusiness sector, the government would focus on four major areas.<\/p>\n
\"For business people, the most important is taxation,\" he
\nsaid on Tuesday.<\/p>\n
The government is discussing amendments of the current tax
\nlaw, which is expected to bring lower tax rates and a simpler
\nprocess.<\/p>\n
The second priority was to improve labor productivity, while
\nthe third and the fourth were improvements of legal certainty and
\nsecurity, respectively, said Laksamana.<\/p>\n
For the last several years, local industries have lost their
\nedge in competing with foreign countries. China, for example,
\nprovides cheaper labor and other Asean countries impose lower tax
\nrates than Indonesia.<\/p>\n
In 2004, exports are expected to increase by 7 percent, thanks
\nto the reviving global economy and an estimated jump in exports
\nto China, which is now fourth for the top export destinations
\nfrom Indonesia.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bi-refuses-to-weaken-rupiah-to-boost-exports-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}