SBI rates raised to prop up rupiah<\/p>\n
JAKARTA (JP): Bank Indonesia (BI) raised again yesterday its
\ninterest rates on short-term promissory notes (SBIs) for all
\nmaturities by between 3 percent and 5 percent in an effort to
\nshore up the rupiah and curb inflation.<\/p>\n
The central bank governor, Sjahril Sabirin, said yesterday he
\nunderstood the measure would force more companies out of business
\nand put a further burden on the people.<\/p>\n
But he said the increase was the only way to shore up the
\nrupiah, whose sharp depreciation against the U.S. dollar sparked
\nthe economic crisis.<\/p>\n
"Our main priority now is to shore up the rupiah to its
\nrealistic level. And SBI is the best instrument available to
\nreach that goal."<\/p>\n
Bank Indonesia raised the overnight SBI rate to 44 percent
\nfrom 40 percent, two-day SBIs to 45 percent from 41 percent,
\nthree-to-six day SBIs to 46 percent from 42 percent, one week to
\n48 percent from 43 percent, and two weeks to 49 percent from 44
\npercent.<\/p>\n
The one-month SBI rate was increased to 50 percent from 45
\npercent, two-month rate to 44 percent from 40 percent, three
\nmonths to 34 percent from 30 percent, six months to 23 percent
\nfrom 20 percent and one year to 21 percent from 18 percent.<\/p>\n
Following the increase, the rupiah strengthened to 7,775
\nagainst the U.S. dollar yesterday morning before closing at 7,900
\nin the afternoon.<\/p>\n
The rise caused stock prices on the Jakarta Stock Exchange
\n(JSX) to fall by 2.1 percent. The JSX composite index dropped
\n10.45 points to 497.70.<\/p>\n
Sjahril promised the central bank would reduce SBI rates
\naccordingly when the rupiah stabilized against the greenback.<\/p>\n
"The central bank is flexible about SBI rates. We will
\ngradually cut our SBI rates if the rupiah has strengthened," he
\nsaid. But he did not elaborate on what level the central bank
\nconsidered appropriate to cut the rates.<\/p>\n
The monetary and interest rate policy, as stipulated in the
\nSupplementary Memorandum of Economic and Financial Policies
\nagreed with the International Monetary Fund on April 7,
\nstipulates that should the exchange rate deviate from its
\nprogrammed path, the net domestic assets and interest rates will
\nadjust as necessary. Interest rates across the spectrum should be
\npermitted to respond to changes in the net domestic assets.<\/p>\n
A central bank director, Miranda S. Goeltom, said Bank
\nIndonesia, as part of its transparency, would make weekly
\nannouncements of monetary data indicators, including reserve
\nmoney, net international reserves and net domestic assets, every
\nTuesday.<\/p>\n
She added that the central bank would also set performance
\ncriteria and indicative targets on monetary indicators to fight
\ninflation and strengthen the ailing rupiah. (aly)<\/p>\n
Table A: Foreign Reserves (in million dollars)<\/p>\n
March 31 April 9 April 17<\/p>\n
----------------------------------------------------------<\/p>\n
Gross foreign assets 16,589.8 16,646.1 17,004.3<\/p>\n
- Liquid reserves * 10,809.9 10,576.3 10,764.3<\/p>\n
- Other reserves ** 5,779.9 6,069.8 6,240.0<\/p>\n
Gross foreign liabilities 2,940.9 2,940.9 2,940.0<\/p>\n
Net forward positions -34.0 -34.0 -34.0<\/p>\n
Reserve against<\/p>\n
foreign currency deposits 435.2 438.4 458.3<\/p>\n
----------------------------------------------------------<\/p>\n
Net international reserves 13,179.7 13,232.8 13,571.1<\/p>\n
* Liquid reserves include gold, foreign securities, offshore
\ndeposits and special drawing rights.<\/p>\n
** Other reserves include export drafts, deposits in the
\nbranches of domestic banks in offshores and deposits parked at
\nforeign banks to guarantee letter of credits.<\/p>\n
Table B: Monetary Indicators (in billion rupiah)<\/p>\n
March 31 April 9 April 17<\/p>\n
----------------------------------------------------------<\/p>\n
Reserve money 59,413 61,752 58,093<\/p>\n
- Currency in circulation 45,096 46,756 44,826<\/p>\n
- Deposits at central bank 13,270 14,020 12,310<\/p>\n
Net international reserves<\/p>\n
- Rupiah at constant rate 92,258 92,630 94,998<\/p>\n
(in million dollars) 13,179 13,232 13,571<\/p>\n
Net domestic assets -30,471 -28,439 -32,883<\/p>\n
- Net claims on government -27,065 -26,023 -28,626<\/p>\n
- Net claims on IBRA 87,044 97,030 103,045<\/p>\n
- Liquidity credits 26,228 26,453 26,517<\/p>\n
of which to Bulog 15,155 15,248 15,248<\/p>\n
- Open market operations -30,151 -37,878 -44,623<\/p>\n
- Net other items -116,884 -116,714 -116,235<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/sbi-rates-raised-to-prop-up-rupiah-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }