Kalla cuts short China visit over rupiah
Rendi A. Witular, The Jakarta Post, Beijing
Vice President Jusuf Kalla has to erase from his agenda his round of golf as the rupiah hit another record low in early trading on Tuesday during his absence.
Instead, the number two man in the government is scheduled to attend a special Cabinet meeting on Thursday to discuss ways to defend the rupiah.
Aboard the Garuda Indonesia Boeing 737-400 heading to Beijing, Kalla announced that he would cut short his six-day business trip to China and Japan, including a round of golf with Toyota Motor Corp. executives in Nagoya.
During a stop in Hong Kong, Kalla received reports that the rupiah had hit Rp 11,800 against the U.S. dollar, leaving President Susilo Bambang Yudhoyono in panic mode as the country's economic affairs have over the last year mostly been in Kalla's hands.
"Due to our unfavorable monetary situation, I decided to return home earlier than scheduled, so I could help the President ease pressures on the rupiah," he explained.
Kalla will still have lunch with Chinese Vice President Zeng Qinghong and meet several Chinese businessmen on Wednesday before heading back to Jakarta.
The VP was originally slated to visit Osaka and Nagoya in Japan from Thursday to Sunday. The visit was mostly aimed at meeting Japanese businessmen to encourage them to invest in Indonesia.
Kalla said he had called Coordinating Minister for the Economy Aburizal Bakrie and Bank Indonesia (BI) Governor Burhanuddin Abdullah to help with the immediate efforts to ease the foreign exchange pressures.
He also called three senior Indonesian business executives asking them to help the government reduce the fluctuation, which had put the rupiah at its lowest level for more than four years -- before a rebound in afternoon trading. But the names of the business executives were not revealed.
"The plunging rupiah can cause serious problems for the real sector since the price of goods will rise further and create massive inflationary pressures. Although we will benefit from our exports, the country, in general, will not benefit at all," said Kalla.
The rupiah on Tuesday rebounded to close at Rp 10,525 per dollar, up by nearly 3 percent from its four-year low on the previous trading day, after BI raised its benchmark interest rate by 75 basis points to 9.5 percent at around noon on Tuesday.
"If the rupiah declines by 4 percent per day, we should unite to address the problem... We must maintain the psychology of the market to remain favorable to avoid further declines in the near future," said Kalla.
He also said he would instruct economic ministers to speed up the preparation to reduce fuel subsidies by raising fuel prices as it was the only feasible solution to help stabilize the country's monetary condition.
When asked if the fuel hike would be decided soon, as he had mentioned it would be by January at the latest, Kalla said he would explore the possibility.
However, State Minister of State Enterprises Sugiharto said that Susilo would not raise fuel prices in the foreseeable future until the Central Statistics Agency (BPS) completed its registration for the number of poor people eligible to receive low income assistance funds.