Kalla cuts short China visit over rupiah<\/p>\n
Rendi A. Witular, The Jakarta Post, Beijing<\/p>\n
Vice President Jusuf Kalla has to erase from his agenda his round
\nof golf as the rupiah hit another record low in early trading on
\nTuesday during his absence.<\/p>\n
Instead, the number two man in the government is scheduled to
\nattend a special Cabinet meeting on Thursday to discuss ways to
\ndefend the rupiah.<\/p>\n
Aboard the Garuda Indonesia Boeing 737-400 heading to Beijing,
\nKalla announced that he would cut short his six-day business trip
\nto China and Japan, including a round of golf with Toyota Motor
\nCorp. executives in Nagoya.<\/p>\n
During a stop in Hong Kong, Kalla received reports that the
\nrupiah had hit Rp 11,800 against the U.S. dollar, leaving
\nPresident Susilo Bambang Yudhoyono in panic mode as the country's
\neconomic affairs have over the last year mostly been in Kalla's
\nhands.<\/p>\n
\"Due to our unfavorable monetary situation, I decided to
\nreturn home earlier than scheduled, so I could help the President
\nease pressures on the rupiah,\" he explained.<\/p>\n
Kalla will still have lunch with Chinese Vice President Zeng
\nQinghong and meet several Chinese businessmen on Wednesday before
\nheading back to Jakarta.<\/p>\n
The VP was originally slated to visit Osaka and Nagoya in
\nJapan from Thursday to Sunday. The visit was mostly aimed at
\nmeeting Japanese businessmen to encourage them to invest in
\nIndonesia.<\/p>\n
Kalla said he had called Coordinating Minister for the Economy
\nAburizal Bakrie and Bank Indonesia (BI) Governor Burhanuddin
\nAbdullah to help with the immediate efforts to ease the foreign
\nexchange pressures.<\/p>\n
He also called three senior Indonesian business executives
\nasking them to help the government reduce the fluctuation, which
\nhad put the rupiah at its lowest level for more than four years
\n-- before a rebound in afternoon trading. But the names of the
\nbusiness executives were not revealed.<\/p>\n
\"The plunging rupiah can cause serious problems for the real
\nsector since the price of goods will rise further and create
\nmassive inflationary pressures. Although we will benefit from our
\nexports, the country, in general, will not benefit at all,\" said
\nKalla.<\/p>\n
The rupiah on Tuesday rebounded to close at Rp 10,525 per
\ndollar, up by nearly 3 percent from its four-year low on the
\nprevious trading day, after BI raised its benchmark interest rate
\nby 75 basis points to 9.5 percent at around noon on Tuesday.<\/p>\n
\"If the rupiah declines by 4 percent per day, we should unite
\nto address the problem... We must maintain the psychology of the
\nmarket to remain favorable to avoid further declines in the near
\nfuture,\" said Kalla.<\/p>\n
He also said he would instruct economic ministers to speed up
\nthe preparation to reduce fuel subsidies by raising fuel prices
\nas it was the only feasible solution to help stabilize the
\ncountry's monetary condition.<\/p>\n
When asked if the fuel hike would be decided soon, as he had
\nmentioned it would be by January at the latest, Kalla said he
\nwould explore the possibility.<\/p>\n
However, State Minister of State Enterprises Sugiharto said
\nthat Susilo would not raise fuel prices in the foreseeable future
\nuntil the Central Statistics Agency (BPS) completed its
\nregistration for the number of poor people eligible to receive
\nlow income assistance funds.<\/p>",
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"sponsor": "Okusi Associates",
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