TEMPO/BI Asked to Allow Rupiah's Improvement

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TEMPO/BI Asked to Allow Rupiah's Improvement - 21 Apr 07 10:22

BI Asked to Allow Rupiah's Improvement
Friday, 20 April, 2007 | 15:18 WIB

TEMPO Interactive, Jakarta: Financial market analyst Reza Wibawa has asked Bank Indonesia (BI) to curb the improvement of the rupiah so that there will not be a sharp sudden increase of rupiah currency.

“Should rupiah sharply increase suddenly, it would endanger the domestic industry in the international market. Our poor exporters,” Reza told Tempo today (04/20).

Reza said that all world currency is improving significantly today against the US dollar. It is only the rupiah that has insignificant improvement because Bank Indonesia controls it.

Reza has predicted that Bank Indonesia will be flooded by US dollars within the coming few months. The cause is that foreign investors will be interested in 40-45 percent of state bonds which will be placed on auction by April 24.

In addition, if revenues acquired from state bonds issuance meet the target of Rp3-4 trillion, it would improve the rupiah exchange rate against the US dollar.

The possibility of rupiah improvement is also supported by a rumor that the US Central Bank, the Fed, has planned to cut the interest rate. Meanwhile, the Central Bank of Japan and the UK will on the contrary increase their interest rate. “This will weaken the dollar more, so BI should let the rupiah improve,” he said.

Eko Nopiansyah