Susilo steps in to ease panic over rupiah<\/p>\n
Rendi A. Witular and Urip Hudiono, The Jakarta Post, Jakarta<\/p>\n
President Susilo Bambang Yudhoyono made an impromptu visit to the
\nJakarta Stock Exchange (JSX) on Wednesday to encourage the
\nbusiness community to have confidence in the country's economy,
\nfollowing a recent slump in local currency and stocks.<\/p>\n
Speaking when closing the day's trading, Susilo urged the
\nbusiness community not to panic in response to the rupiah's
\nrecent slide against the dollar as the country's economy remained
\nstrong.<\/p>\n
\"I would like to affirm the government's serious efforts in
\naddressing the currency woes. Don't panic because our foreign
\nexchange reserve is still sufficient and our underlying economy
\nis strong,\" he said.<\/p>\n
According to Susilo, the country's overseas currency reserve
\ncurrently stands at some US$35 billion.<\/p>\n
The rupiah continued its recovery to end higher by 1.2 percent
\nagainst the U.S. dollar on Wednesday to Rp 9,573 from Rp 9,688 on
\nTuesday and from its three-year low of Rp 9,750 on Monday.<\/p>\n
The extended recovery is supported by the central bank's
\ndecision to unload its dollar reserves to prevent the local note
\nfrom diving further and to provide a number of new monetary
\ninstruments aimed at preventing the rupiah from being speculated.<\/p>\n
Tracking the recovery of the rupiah, the Jakarta stock market
\nalso ended slightly higher. The Jakarta Composite Index closed up
\n0.450 points to 1032.218, with a transaction volume of 1.25
\nbillion shares valued at Rp 1.4 trillion ($145 million).<\/p>\n
Susilo said the government would work closely with Bank
\nIndonesia (BI) to ensure that the monetary condition remained
\nstable, with efforts from the government's side to control the
\nmassive buying of dollars by a number of state enterprises.<\/p>\n
\"The government has instructed all state enterprises to
\ncoordinate with BI before buying the greenback in a large amount
\nto prevent a shock in the market as well as to reduce speculation
\nactivities,\" he said.<\/p>\n
He acknowledged that one of the main culprits in contributing
\nto the decline in the rupiah was the uncontrollable massive
\nbuying of dollars by state oil and gas company PT Pertamina aimed
\nat importing fuel for the domestic market.<\/p>\n
State Minister of State Enterprises Sugiharto said the
\ngovernment would from now on prohibit Pertamina from directly
\nbuying dollars from the spot market to avoid volatility in the
\nrupiah and the triggering of speculation activities.<\/p>\n
He said in the future Pertamina could only buy dollars from BI
\nafter comprehensive coordination with the monetary authority and
\nhis ministry.<\/p>\n
\"We are currently discussing with BI the technical procedures
\nfor state enterprises in buying dollars,\" he said, adding that
\nPertamina would need $50 million each day to finance the import
\nof fuel.<\/p>\n
Sugiharto also said the ministry was still discussing with the
\ncentral bank the possibility of Pertamina directly acquiring its
\nforeign exchange revenue from the export of oil and gas.<\/p>\n
The move is made to help maintain Pertamina's foreign currency
\ncash flow for importing fuel.<\/p>\n
At present, Pertamina has to hand over its oil export revenue
\ndirectly to the central bank.<\/p>\n
Susilo also voiced his optimism that the country's inflation
\nrate would remain on track this year because the recent high
\ninflation pressure was mainly a reaction to the fuel price
\nincrease.<\/p>\n
\"Inflation is still under control. In the coming months, we
\nhave estimated that inflationary pressure will ease and economic
\ngrowth will remain on track,\" he said.<\/p>",
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