BI TO LET RUPIAH STRENGTHEN AGAINST DOLLAR

The rupiah has lost over 50 per cent of its value against US dollar

Jakarta, 23 Dhulhijjah 1436/7 October 2015 (MINA) – Bank Indonesia (BI), the central bank, is to let the rupiah strengthen against
US dollar as it happened during the last few days, saying despite its great volatility, the rupiah is still below a fair value (undervalued).

“Let it so. In fact we need to push it again. When the rupiah is at 13,800 per dollar, RER (real exchange rate) was at level 89. That means that the rupiah was at undervalue. The RER competitive rupiah value is 95-97,” BI Senior Deputy Governor Mirza Adityaswara told reporters at the BI head office building, here, Wednesday.

Mirza also said the biggest daily rise since December 2008 is something reasonable because the weakening of the local currency against the greenback during this time is great as well.

Easily tossed the udder of the rupiah against the US dollar, he said, it was as a result of lack of foreign exchange market in the country which is only about five billion dollars per day comparing with that in Singapore at about 300 billion dollars.

The central bank has taken some policies aimed at balancing the supply and the demand of the greenback in the currency market.

The efforts, he said, is part of a policy to increase the supply of foreign currency badly needed by the real sector such as tourism, exports and foreign investment.

Indonesia will announce a third stimulus package later in the day aimed at supporting consumption, streamlining the bureaucracy and reviving economic growth, a senior economics minister said. (T/R07)

Mi’raj Islamic News Agency (MINA)