Indonesian Political, Business & Finance News

Market sentiments and the rupiah

Market sentiments and the rupiah

From Rakyat Merdeka

As far as I am concerned, the value of the rupiah has nosedived ever since President Abdurrahman "Gus Dur" Wahid reshuffled his Cabinet, and appointed people not favored by the market. At that time, experts and economic observers said Gus Dur was going against the market. The market did react negatively and the ire of the market still persists.

I am deeply concerned about the rupiah. I have been wanting to buy a new computer, but still cannot afford to as the rupiah is still weak. I am dreaming and hoping the rupiah will strengthen to Rp 7,000 to the dollar. However, I think my dream will never come true even if I wait until kingdom come.

In the 2001 state budget, the government set the rupiah's exchange rate at Rp 7,600 to the dollar which then was adjusted to Rp 8,000. Will the exchange rate of rupiah be pegged at Rp 7,000 to the dollar? No way. The central bank may have intervened in the market many times and the dollar may have lost a few points, but please do not have high hopes that the rupiah will settle at Rp 8,000 or much more, Rp 7,000. Why? Because the problem is psychological too. The market sentiments and response with regard to the government's credibility is indeed difficult to understand and unpredictable, but they need to be taken into account.

SETIAWAN SALMIN

Jakarta

View JSON | Print