Rupiah too weak: Soedradjad

Rupiah too weak: Soedradjad

HONG KONG (AP): Indonesia's former Bank Indonesia (BI) governor J. Soedradjad Djiwandono said yesterday that the recent weakening of rupiah was caused purely by social unrest and that it should be stronger.

Speaking after a conference on Asia's economies in Hong Kong, Soedradjad said international investors have a long and insatiable wish list which Indonesia found it almost impossible to meet.

He said the rupiah should have strengthened after Indonesia delivered the promised reforms and the International Monetary Fund agreed to disburse the aid money.

"Instead, investors are now focusing on the social and political factor," he said. "The market is demanding a lot and one can't produce everything in one go."

The Indonesian currency closed at 9,620 rupiah to the dollar yesterday, down from its closing level Wednesday of 9,050 rupiah, as rioting spread from the North Sumatra city of Medan to nearby towns.

The rupiah has fallen more than 16 percent since Tuesday when price rises took effect as part of a wider economic reform package to win financial aid from the International Monetary Fund.

Soedradjad said he was surprised that the first budget delivered by President Soeharto in January was widely denounced by the international community.

"It said it was a lousy budget without looking into some of the details which were good," Soedradjad said. "When international confidence is lost, everything is black and white."

He said the immediate concern of Indonesia is "to survive."