May 18 10:37

Rupiah fall driven by global factors - Budiono

Jakarta (Antara News) - The rupiah's fresh slide against the dllar is caused by global factors, given that government policies remain atractive for investment here, Coordinating Minister for the Economy Budiono said.

In early morning trade the rupiah fell to 9,250/9,270 to the dollar,
sharply down from yesterday's level of 8,910/8,920.

"This is a global process from the past several days and we're impacted
by it," Budiono told reporters.

Foreign exchange dealers attributed the rupiah's drop to concerns over

further US interest rate hikes after the overnight release of higher-than-expected US inflation data. (*)

Is it true that Indonesia is attractive for investment? From past discussions here, and reading the media, I thought that the Goverment were trying to change things around because Indonesia is not a place people wanted to do business. Not so long ago i read something about how the government were cracking down on immigration as Business men from other countries were complaining there rights were being abused.

what the government says, and what actually happens are entirely different matters.

Influences for the highly crude oil prices for the global economic:

1.Transfer of Income
There was a transfer income from the importer country to the oil exporter country by term of trade mutation.

2.Production cost
The highly prices for the crude oil will make the production cost rising up, and pressure the company profit.

3.Inflation and Price level
The highly inflation will depends on pass through inflation effect of the crude oil prices for the domestic inflation, energy regulation from the country itself, consume reaction for decline real income and ask for the salary increase higher, and how the producer trying to make the profit margin back.

4.Monetary Market
5.Oil Consumption and Production

I agree. Western governments who place a tax fuels on a percentage based consumption tax on fuel oil find their tax incomes increasing as the prices go up (a 10% value added tax ). Consumers find an exponential increase in prices.

Governments use the excuse that this tax increase helps to control inflation by demand reduction via pricing.

Governments are tax addicted idiots who fail to learn the Western economies are driven by fuel prices. The Fuel shocks of 73 and later were al closely followed by rampant inflation. It’s a simple correlation. If fuel goes up workers demand more money to pay the bills. As so up goes the cost of living, until fuel once again reaches its pro rata place in the economy.