Govt, businessmen argue over ideal level for rupiah<\/p>\n
JAKARTA (JP): Recent advances made by the rupiah against the
\nU.S. dollar has left the government and the business sector
\narguing over the ideal level for the currency in the economy's
\npresent state.<\/p>\n
The latest call for a limit to the sharp appreciation of the
\nrupiah came from commodity and furniture exporters, who said the
\ndramatic appreciation of the currency in the money markets had
\npresented them with a serious cash flow problem. They explained
\nthat they buy raw materials for their exports at an assumed
\nexchange of over Rp 8,000 to the dollar, but export revenues are
\nnow being realized at around Rp 7,000.<\/p>\n
"We feel that we must remind the government to limit the sharp
\nappreciation of the rupiah because it will have a negative impact
\non exporters, especially small and middle-sized exporters," said
\nFirdaus Juven, a director of PT Chempex Jaya.<\/p>\n
Firdaus claimed that 13 other exporters had voiced similar
\nconcerns.<\/p>\n
"Many exporters are now unsure about whether to purchase (raw
\nmaterials) because they fear the rupiah may jump to the Rp 5,000
\nlevel," he said in statement on Saturday.<\/p>\n
Coordinating Minister for Economy, Finance and Industry
\nGinandjar Kartasasmita caused controversy on Wednesday by saying
\nthe ideal level for the rupiah was between Rp 7,000 and Rp 8,000.
\nHe argued an exchange rate in that band would maintain the
\ncompetitiveness of Indonesian exports in the region.<\/p>\n
His comments brought the recent appreciation in the rupiah to
\nan immediate halt and sent it sliding back to Rp 7,850 at the
\nclose of trade on Friday, down from an eight-month high of Rp
\n7,050 reached earlier in the week.<\/p>\n
Bank Indonesia Governor Sjahril Sabirin said on Friday that
\nthe rupiah would still be able to reach a level of between Rp
\n6,000 and Rp 6,500 on the back of improving economic fundamentals
\nand renewed confidence in the country.<\/p>\n
He stressed that a stronger rupiah would not hurt the
\ncompetitiveness of exports and said it would instead cut the cost
\nof raw materials for exporters.<\/p>\n
"At a level of between Rp 6,000 and Rp 6,500, exporters will
\nbe able to buy raw materials at cheaper prices," he said.<\/p>\n
The rupiah has risen sharply from over Rp 11,000 last month on
\nthe back of various factors including the strengthening of the
\nyen against the U.S. dollar, government dollar selling, improving
\ndomestic economic indicators and positive remarks made by the IMF
\nregarding progress in the country's program of economic reform.<\/p>\n
Bank Indonesia director Miranda Goeltom was also upbeat about
\nprospects for the rupiah to strengthen beyond the Rp 7,000 level
\nand stressed that the central bank would not restrict the
\nappreciation of the currency.<\/p>\n
She said that a stronger rupiah would be beneficial to local
\ncompanies saddled with massive overseas loans. (rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-businessmen-argue-over-ideal-level-for-rupiah-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}