Rupiah set at 4,000 to U.S. dollar in state budget<\/p>\n
JAKARTA (JP): The government set the U.S. dollar-rupiah
\nexchange rate at 4,000 in its calculations for the 1998\/1999
\nstate budget.<\/p>\n
President Soeharto said last night that the government did not
\nwant to see the rupiah too strong, thus weakening the
\ncompetitiveness of Indonesian exports.<\/p>\n
\"Nor should we let the value of our rupiah to be too low, as
\nit will put an excessive burden on our economy,\" Soeharto said in
\nhis state budget address.<\/p>\n
\"On this basis, an exchange rate of Rp 4,000 to US$1 has been
\nused in drafting the current state budget,\" he added.<\/p>\n
Minister of Industry and Trade Tunky Ariwibowo said the
\ndecision to set a 4,000 level for the rupiah's exchange rate was
\nbased on the respective capabilities of Indonesia's exporters and
\nimporters.<\/p>\n
\"In the current situation, the 4,000 level is appropriate for
\nboth exporters and importers. It will maintain the
\ncompetitiveness of Indonesian exports and at the same time it
\nwill not put a greater burden on imports,\" he said.<\/p>\n
Minister of Finance Mar'ie Muhammad acknowledged that the
\n4,000 level was optimistic, but the government would do whatever
\nwas necessary to strengthen the rupiah to that level.<\/p>\n
\"We will do our utmost to get the rupiah to our target,
\nincluding by continuing reforms. There is no other choice
\navailable now but undergoing reform,\" Mar'ie said.<\/p>\n
However, Mar'ie said, the reforms would not impress market
\nplayers and would not help the rupiah if neighboring countries
\ndid not take similar steps to improve their economies.<\/p>\n
\"If every country, including Indonesia, does their homework in
\nimproving their competitiveness, 4,000 rupiah to one U.S. dollar
\nwould be achievable,\" he said.<\/p>\n
The rupiah hit a historic low of 7,750 to the U.S. dollar
\nyesterday morning before recovering to 6,950\/7,250 at the close
\nin the Jakarta market.<\/p>\n
The rupiah has lost more than 60 percent of its value against
\nthe U.S. dollar since July, when the financial crisis first hit
\nthe Southeast Asian region.<\/p>\n
Mar'ie said the rupiah's current exchange rate against the
\nU.S. dollar at above 7,000 would be temporary as it was very much
\ninfluenced by negative market sentiments.<\/p>\n
When these sentiments turned positive, the rupiah would
\nstrengthen, he said.<\/p>\n
Market sentiments, Mar'ie said, were influenced by both
\neconomic and noneconomic factors.<\/p>\n
Economic factors included the levels of public and private
\nsector foreign debt, while noneconomic factors were issues such
\nas the transparency of the legal system.<\/p>\n
Minister\/State Secretary Moerdiono added that the rupiah's
\nfree fall against the U.S. dollar was accelerated by diminishing
\ninvestor confidence in the currency and Indonesia's economic
\noutlook.<\/p>\n
\"Therefore, our agenda should focus on efforts to restore
\nconfidence in the rupiah and the prospects for our economy,\"
\nMoerdiono said.<\/p>\n
Mar'ie said that if all efforts failed and the rupiah remained
\nfar higher than the targeted 4,000 level, the government would
\nmake adjustments to the 1998\/1999 budget.<\/p>\n
\"In this unpredictable environment, adjustments are very
\nimportant. So if... the situation is like that (that the rupiah
\ndoes not achieve its target), we will certainly make some
\nadjustments,\" Mar'ie said. (rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/rupiah-set-at-4000-to-us-dollar-in-state-budget-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}