Rupiah as a commodity

Rupiah as a commodity

The Bank for International Settlements' 67th annual report concerning the rupiah, merely reasserts a reality that has existed in the financial market for quite some time. The rupiah has become a profit-yielding, tradable currency. Several prestigious financial establishments have even opened an Indonesian desk to keep a close eye on this country.

The fact that the rupiah is now an exotic currency finds its origin in the government's consistent monetary policy. This has provided solid ground for speculators and others who are active in the money market to reap profits from the rupiah as a trading commodity.

But the rupiah's popularity in the money market has several implications. Our monetary authority must be ready to deal with speculators whose actions are profit-oriented. At the same time, it must be ready to deal with actions that are aimed at undermining its authority. The fact is that, in general, those speculators control highly sophisticated tools for analysis and technology as well as huge amounts of funds.

What can we do in response to such a development? First of all, it is fundamental to strengthen our economy. Second, we must muster the political will to respond with appropriate measures under any circumstances. Finally, we must be careful in airing views that can be exploited by unprincipled investors.

It is fortunate that our monetary authority has already established cooperation with government-owned banks in several Asian countries as a preventive measure to guard against speculators. This will provide an effective shield in the case of such offensives.

-- Bisnis Indonesia, Jakarta