BI comfortable with current level of rupiah
The Jakarta Post, Jakarta
Bank Indonesia governor Burhanuddin Abdullah said on Thursday that the central bank felt comfortable with the current trade range of the rupiah and expected the currency to stay in the range for the rest of the year.
"We have a comfort zone of 8,200 and 8,700 per (U.S.) dollar for the rupiah. As long as it (the rupiah) moves within that range, I think Bank Indonesia will feel comfortable," Burhanuddin told reporters in the first remarks in recent months by the monetary authority about a desirable trading level for the rupiah.
The rupiah closed the day at 8,375 against the U.S. dollar, slightly stronger than the Rp 8,385's closing on Wednesday.
Despite various shocks, the local currency has been generally performing well against the dollar since the start of the year, thanks to the country's encouraging macro-economics picture here and the shaky dollar performance.
The rupiah has strengthened by about 7 percent against the dollar throughout the year.
The government has targeted the rupiah to average 8,500 per dollar this year.
The latest positive news came only recently when Moody's Investors Service, an international rating agency, upgraded Indonesia's sovereign rating to B2 from B3, thanks mainly to the country's falling public debts and stronger external financial footing, as shown in the solid foreign reserves, currently at US$34 billion.
Burhanuddin also said he expected the central bank's benchmark one-month promissory notes (SBI) interest rate to hover at 8.5 percent by the end of the year on the back of mild inflation.
Currently, the rate stands at an all-time low of 8.59 percent, far below the 13 percent at the end of last year.
Inflation, as reported by the Central Statistics Agency (BPS), rose by 0.36 percent in September, bringing the total figures in the first nine months of the year to a modest level of 2.48 percent, with year-on-year inflation at 6.2 percent.
BPS said if the current trend continued, full-year inflation would only reach 6 percent by year-end, around the same level targeted by the state budget.