Kalla: The Problem is Not with Rupiah
18 December 2014 05:26 WIB
TEMPO.CO, Jakarta - Vice President Jusuf Kalla said that the rupiah correction against the US dollar is not caused by a problem with the Indonesian currency. "This is not a rupiah downtrend, it is a [US] dollar uptrend that led to the weakening of rupiah," Kalla said at his office, yesterday.
According to Kalla, the greenback gain impacts not only the rupiah but also the currencies of countries with stronger economy than Indonesia such as Japan, Malaysia, South Korea, and Australia. "In fact, it has a smaller effect on the rupiah," said Kalla.
Meanwhile, President Joko Widodo seems certain that the rupiah will not stay depreciated. "The correction will not last long," said Joko Widodo President yesterday, ensuring that Indonesia's economic fundamentals continue to improve with the government's expanding fiscal space and better trade performances—gained from increasing industrial exports and curbing imports.
Finance Minister Bambang P.S. Brodjonegoro said that expectations of a faster econnoic recovery in the US have pushed investors to withdraw their funds from developing countries and invest in their homeland. Another factor causing the rupiah depreciation, he said, is the Russian ruble's correction against the greenback, which prompted the Russian central bank to raise its benchmark interest rate by 650 basis points to 17 percent.
To stabilize the financial market, Bank Indonesia deputy governor Perry Warjiyo said the central bank has purchased Rp1.7 trillion of Government Securities (SBN). "We bought Rp1.5 trillion on Monday, and on Tuesday we bought Rp200 billion," said Perry.
On Tuesday's currency trade, the rupiah struck a 16-year low of over 12,900 per US dollar before closing at 12,725.
On Wednesday, therichest.com put the rupiah among 15 of the world's most worthless currencies. Quipping The Economist, it said that Indonesia's "awful infrastructure, foot-dragging bureaucrats and rampant corruption" and the high subsidy of gas price have left the country with little money to build modern infrastructure.
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