Rupiah set to gain on dollar this year: BI

Rupiah set to gain on dollar this year: BI

The Jakarta Post
Jakarta

Despite a recent slide, the rupiah is expected to stabilize in
relation to U.S. dollar in the second half of the year and head
for a level below 9,000 per dollar by the end of the year, Bank
Indonesia senior deputy governor Miranda S. Goeltom said on
Friday.

Betting on the flows of foreign investment boosted in part by
the improving global and domestic economy, "the rupiah will be on
an strengthening trend within the range of 8,600-9,200," Miranda
predicted.

Moreover, the recent acquisition offer for the country's third
largest cigarette maker PT Hanjaya Mandala Sampoerna, and the
planned US$2.6 billion debt moratorium from the Paris Club of
creditor nations, should ease demand for the dollar, thus easing
the pressure on the local currency, Miranda said.

Earlier this week, the world's biggest cigarette producer
Philip Morris International Inc. offered to purchase a
controlling stake in Sampoerna for Rp 48 trillion (about $5.1
billion).

Fauzi Ichsan, lead economist at the Standard Chartered Bank,
agreed that the rupiah had a strong chance of gaining on the U.S.
greenback later this year and could end at Rp 8,700 per dollar.

In addition to the debt moratorium, Fauzi said the local unit
would also benefit from the disbursement of International
financial aid for the tsunami-stricken areas.

In the short term however, pressure on the rupiah would remain
amid uncertainty about the social impact of the recent hike in
domestic fuel prices and soaring oil price, according to Fauzi.

"That's why I do not think that the rupiah will go lower than
9,100 (this semester)."

On Friday, the local unit closed unchanged at 9,363 against
the dollar.