Rupiah may strengthen to 8,000 against dollar: BI<\/p>\n
JAKARTA (JP): Bank Indonesia Governor Sjahril Sabirin said on
\nFriday the rupiah could strengthen to Rp 8,000 against the U.S
\ndollar, provided political stability would endure to help boost
\nmarket confidence.<\/p>\n
He said he expected pressure from political instability to
\nease, following the relatively peaceful election of the country's
\nfifth president.<\/p>\n
\"In view of its real exchange rate, the rupiah should be
\nvalued at below 8,000 to the dollar... it might reach that level
\nif noneconomic factors have been cleared,\" he told reporters.<\/p>\n
He said the appointments of President Megawati Soekarnoputri
\nand Vice President Hamzah Haz, were a reprieve for the battered
\nrupiah following months of political instability.<\/p>\n
Sjahril said he was upbeat about working closer with the next
\neconomic team and when asked whether he sought better
\ncoordination with the new team, Sjahril said he hoped so.<\/p>\n
\"At least we have a more stable situation and if this
\ncontinues and even improves... we may start to lower interest
\nrates,\" he went on.<\/p>\n
The interest rate of Bank Indonesia's one-month promissory
\nnotes (SBI) stands at 17.17 percent, which Sjahril has said was
\nhigh enough.<\/p>\n
But he added the central bank would monitor the country's
\nmonetary condition for a few more weeks before deciding to lower
\nthe SBI rates.<\/p>\n
\"We cannot simply cut rates, we'll have to observe the
\nmonetary indicators,\" he said, adding: \"with inflation rates
\nstill high we must be careful in lowering the interest rates.\"<\/p>\n
Year-on-year inflation has been hovering at above 10 percent
\nsince March, mainly on the back of a weaker rupiah, coupled with
\nhigher fuel and electricity prices.<\/p>\n
The state budget has assumed an inflation rate of up to 9.3
\npercent and a rupiah rate of 9,800 to the U.S dollar.<\/p>\n
He said if the market remained optimistic after the recent
\npolitical events, he was confident Bank Indonesia could meet the
\nmonetary targets under the state budget.<\/p>\n
The local unit only recently recovered, as the country's
\npolitical impasse reached its climax without the feared violent
\nrepercussions at the grass-roots level.<\/p>\n
It closed Friday trading at 10,000 against the U.S dollar,
\nmuch higher than at 11,148 the week before.<\/p>\n
Monday's appointment of President Megawati had sent market
\nplayers into a two-day euphoria that jerked the rupiah to its
\nfour-month high at 9,850 against the greenback.<\/p>\n
However, concerns over the line up of the next Cabinet sobered
\nmarket players into keeping their dollars during the remainder of
\nthe week.<\/p>\n
Some analysts questioned the rupiah's ability to remain
\nbullish, as corporate demands for the dollar continue to be high.<\/p>\n
Also, to meet the average rate of 9,800 to the dollar, the
\nrupiah must strengthen to about 8,400 for the rest of the year.
\n(bkm)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/rupiah-may-strengthen-to-8000-against-dollar-bi-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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