Indonesian Central Bank to Support Export Following Rupiah Appreciation

Jakarta, 06 Muharram 1438/07 October 2016 (MINA) – Bank Indonesia (BI), the central bank, will maintain rupiah at a level which can support exports following the appreciation of the currency against U.S. dollar, deputy at the bank said here on Thursday

BI Deputy Governor Mirza Aditswara made the statement as rupiah has strengthened around 6 percent against the greenback this year while the shipment of the country’s commodities and other products overseas remains subdued.

“Rupiah which keeps appreciating is not a good thing. Should exports be weak, so we have to take measures to boost exports. Rupiah should reflect its fundamental value,” Xinhua quoted Mirza as saying at the bank headquarters.

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Last week rupiah gained 1 percent a U.S. dollar and was at the level of 12,992 per one U.S. dollar on Thursday, according to the bank’s website.

Indonesia’s inflation has been in check, giving rooms to the monetary policy maker to continue implementing easing policy after it trimmed a seven-day reverse repo rate 25 basis points to 5.00 percent last month.

A huge inflow of capitals following the implementation of tax amnesty program in July partly helps strengthening rupiah against the U.S. dollar.

The Southeast Asia’s largest economy is expected to expand steadily this year and next year, 5.2 and 5.1 percent respectively, amid contraction in some other countries.

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Still, the central bank needs to watch closely the risks of possible hawkish stance of the U.S. Fed. Reserve to be taken at its December’s meeting. (T/R07/R01)

Mi’raj Islamic News Agency (MINA)