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