BI to keep Rupiah stable at around Rp9,000 against US Dollar

Jakarta (Antara News) - Bank Indonesia (BI) Governor Burhanuddin Abdullah said here on Wednesday the bank would strive to make the exchange rate of the country`s currency stable at around Rp9,000 against the US dollar in support of the real sector.

"We will try to make it stable meaning we will maintain its volatility. In case a fluctuation happens it will remain within a measured range. It is possible for the rupiah to reach close to Rp9,000," he said.

He said the effort was important to avoid possible damage on the economy. "We must never let the rate change excessively within a very short period because it will disrupt business," he said.

He said BI did not intend to hold the rupiah. "What is maintained is its volatility, not its rate. We do not have a rate target," he said.

Regarding Bank Indonesia Certificate (SBI), Burhanuddin said it was on a downward trend. "Based on the last two actions the trend is downward. First it collected Rp16 trillion and then it dropped by a few trillions. The trend is levelling off, downward," he said.

According to him, this was a good indication because it meant banks were expanding in the credit sector. "Expansion in the credit sector has begun although the speed is not as fast as we hoped for. I think by the end of the year it will be faster," he said.

He said credit distribution had not yet been optimal with the lending-to-deposit ratio reaching more than 60 percent while banking funds currently invested in SBIs reached around Rp170 trillion.

Regarding the use of State Treasury Certificates (SPN) to replace the SBI Burhanuddin said the time still had yet to be determined. "Indeed ideally it must be used to replace the SBI like in other countries," he said.(*)
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