Sjahril calls rupiah's drop 'normal'<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
The weakening of the rupiah to the U.S. dollar this week is
\nwithin a normal range and will not have a negative effect on
\ninflation or interest rates, Bank Indonesia Governor Sjahril
\nSabirin said on Friday.<\/p>\n
He said that the rupiah was under pressure because there was
\nstrong dollar demand in the market, including from corporations,
\nbut he was unsure why people were buying dollars.<\/p>\n
\"But it's still normal,\" Sjahril told Antara.<\/p>\n
The rupiah rose steadily during the first half of this year
\namid positive sentiment created by the relatively calmer
\npolitical conditions at home and a successful outcome from the
\nParis Club sovereign debt restructuring talks. It managed to
\nstrengthen to a nine-month high of about Rp 8,500 to the dollar
\nlast month, making it one of the best performing currencies in
\nthe region.<\/p>\n
But during the past three weeks, the rupiah has been under
\nstrong pressure, breaking through the Rp 9,000 level for the
\nfirst time in more than a month.<\/p>\n
On Friday, the local currency ended at Rp 9,100, slightly
\nhigher than Thursday's close at Rp 9,125.<\/p>\n
Traders said the rupiah got help from Bank Indonesia, which
\nhas been intervening in the market lately.<\/p>\n
According to Dow Jones, the central bank was believed to have
\nsold about $40 million on Friday.<\/p>\n
Sjahril said Bank Indonesia had been intervening by selling
\noff dollars, but he declined to give exact figures.<\/p>\n
Some analysts, however, said that the rupiah would likely
\ncontinue its fall past the Rp 9,500 level. They argued that the
\nlocal currency was similar to those of other developing
\ncountries, such as Brazil, whose currency has been under a great
\ndeal of strain over heightened concern of its ability to repay
\nforeign debts. Indonesia also has large foreign debts amounting
\nto about $130 billion.<\/p>\n
The weakening of the rupiah has created concern that the
\ncountry's macroeconomic condition is once again under serious
\nthreat.<\/p>\n
The strengthening of the rupiah during the first half of this
\nyear had helped to keep inflation at mild levels and allow the
\ncentral bank to continue lowering the domestic interest rate.<\/p>\n
These favorable developments in the rupiah, the interest rate
\nand inflation stirred optimism among government officials that
\nthe macroeconomic condition for the second half of this year
\nwould be in even better shape.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/sjahril-calls-rupiahs-drop-normal-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}