Dollar hoarding

Dollar hoarding

In view of present currency scenario, the majority of
exporters, corporations and individuals are holding dollars in
their accounts and avoiding conversion to the local currency,
thereby enhancing the scarcity of dollars in the market which is
pushing the rupiah further downwards.

There are several measures which can be taken to reverse the
present trend. I would like to suggest one such scheme which can
stabilize the currency to some extent. The scheme is as follows:

* Any exporter, company or individual who converts dollars to
rupiah at the government's approved counter is issued a
certificate stating the details of the transaction such as
amount, conversion rate, date, name etc.

* The certificate entitles the holder to exercise his option
to buy back the same number of dollars at the same conversion
rate, within the specified period of time, say 12 months.

This scheme will encourage the corporate sector and
individuals to convert their dollars to the local currency as it
covers their risk. Considering the present situation innovative
schemes and damage control exercises are required to restore
confidence.

R.K. CHOPRA

Jakarta