Central bank constrained to support falling rupiah<\/p>\n
SEOUL (Dow Jones): Bank Indonesia (BI) is constrained in its
\nability to support the falling rupiah, the central bank's Acting
\nGovernor Anwar Nasution said Thursday.<\/p>\n
\"I believe that there is some limit to what we can do to
\ndefend the rupiah,\" Nasution told Dow Jones Newswires before the
\nstart Friday of the Executives' Meeting of East Asia and Pacific
\nCentral Banks, or EMEAP.<\/p>\n
In addition to the continued worldwide strength of the U.S.
\ndollar, the rupiah has also been clearly weakened by domestic
\npolitical and economic unrest, Nasution said, which he described
\nas \"the price of democracy we have to pay.\"<\/p>\n
Still, Nasution said that the Indonesian government has no
\nplans to make any significant changes in its existing foreign
\nexchange regime, maintaining that \"we're not about to introduce
\ncapital controls or a currency board system.\"<\/p>\n
Nasution said that taking such measures would only be
\nappropriate in case of a crisis.<\/p>\n
\"We're not in a crisis,\" he said, arguing that the country was
\nexperiencing \"only temporary\" financial market turbulence.<\/p>\n
\"It's like flying from here to Jakarta,\" he said. \"The way is
\nbumpy but I don't think this is a reason to change plans.\"<\/p>\n
Around 11:09 GMT (7:09 a.m. EDT), the dollar was quoted at Rp
\n9,283, down from Rp 9,355 late Wednesday.<\/p>\n
Nasution said the Indonesian government will sign its letter
\nof intent with the International Monetary Fund (IMF) in two weeks
\nto receive the next tranche of its IMF loan.<\/p>\n
The signing of the letter should boost confidence in
\nIndonesia, he said. The pace of Indonesian bank restructuring has
\nbeen \"very slow but we're making progress,\" Nasution said.<\/p>\n
Asked about what impact the detention of Bank Indonesia
\nGovernor Sjahril Sabirin was having on morale at the central
\nbank, Nasution said that \"we are very sad about the events,\"
\nadding that, \"the show goes on...it doesn't affect day-to-day
\noperations.\"<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/central-bank-constrained-to-support-falling-rupiah-1447893297",
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