Rupiah gains from peaceful election: BI<\/p>\n
Dadan Wijaksana, Jakarta<\/p>\n
The trouble-free presidential election has reduced the risks
\nof uncertainty and improved people's expectations on the economy
\n-- thus easing pressure on the rupiah, according to the central
\nbank.<\/p>\n
\"It's a relief as it (the election) has reduced various risk
\nfactors stemming from this transitional period.<\/p>\n
\"The election has been swift, safe, and so orderly that the
\npeople feel comfortable about it,\" Bank Indonesia Governor
\nBurhanuddin Abdullah said on Wednesday.<\/p>\n
Burhanuddin was confirming the market's positive reaction to
\nthe country's first direct presidential election, which has seen
\nan upswing of the local unit against the U.S. dollar since early
\nlast week.<\/p>\n
The rupiah maintained its strong hold on the dollar for the
\nseventh day in a row, to close on Wednesday at 9,005, slightly up
\nfrom 9,020 the day earlier.<\/p>\n
While last week's surge had plenty to do with confidence over
\nthe election, the market's bullish sentiment has grown even
\nstronger after that confidence actually materialized.<\/p>\n
Last week, the rupiah climbed by some 3 percent.<\/p>\n
Most of the 155 million registered voters cast their votes on
\nJuly 5 to determine the country's leadership for the next five
\nyears.<\/p>\n
With the tally now close to half of the votes, Susilo Bambang
\nYudhoyono is leading the way after securing about 33 percent of
\nthe vote, with Megawati Soekarnoputri and Wiranto second and
\nthird respectively.<\/p>\n
Some dealers have in part attributed the rupiah's rise to the
\nmarket's optimism over the pairing of Susilo and Yusuf Kalla, who
\nhave pledged to stamp out rampant corruption and boost foreign
\ninvestment to generate high economic growth.<\/p>\n
Burhanuddin did not mention how far the local unit would
\nrebound, but central bank senior governor Miranda Goeltom said on
\na separate occasion that if the current conducive atmosphere
\ncould be maintained, the rupiah could reach 8,300, especially if
\nthe election resulted in a credible government.<\/p>\n
The 2004 state budget targets an exchange rate of 8,600 for
\nthe rupiah against the dollar.<\/p>\n
The strong showing of the rupiah could prove beneficial in
\neasing inflationary pressure, with Burhanuddin betting on meeting
\nthe central bank's target range of 5.5 to 6.5 percent.<\/p>\n
\"The target should remain achievable if we can retain current
\nstability until the year end,\" Burhanuddin said.<\/p>\n
Inflation had reached 3.29 percent as of June, the latest data
\nfrom the Central Statistics Agency (BPS) showed.<\/p>\n
Benign inflation bodes well with the central bank's cautious
\napproach toward lowering its benchmark interest rates.
\nMeanwhile, Bank Indonesia announced on Wednesday that its
\nbenchmark interest rate increased slightly to 7.37 percent from a
\nprevious 7.34 percent.<\/p>\n
Meanwhile in the stock market, the stock index went up by 0.4
\npercent on the day.<\/p>\n
The Composite Index ended up 3.409 points at 771.66 points at
\nTuesday's closing. The index jumped 3.1 percent on Tuesday, one
\nday after the election.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/rupiah-gains-from-peaceful-election-bi-1447893297",
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"sponsor": "Okusi Associates",
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