June 1, 2009

BI promise not brake Strengthening Rupiah

Bank Indonesia (BI) promise will not intervene in the movement of the rupiah against the U.S. dollar (U.S.). This statement responding to the suspicion that a strengthening of BI rupiah exchange rate of road as it were in place even though the flow of foreign funds flowing to the swift exchange of debt instruments and shares of Indonesia.

Director of the Directorate of Management of foreign exchange BI Rasmo Samiun reveal, prevent the rupiah same send bad signals to the market. "Once a strengthening rupiah, BI, the rupiah akan menguat always difficult," said Rasmo to Kontan.

If BI intervence strengthening rupiah, Rasmo supplement, then the market will know how many rupiah exchange rate and the desired central bank. If this happens, the owners intention funds abroad to buy dollar assets, will dim. "Markets will not oppose the intervention because of the weapons in BI is the rupiah means that nearly unlimited," he said.

Despite oppugn had to intervene, Rasmo not refuse BI oversee the rupiah against the U.S. dollar. BI feel the need to prevent the rupiah exchange rate fluctuation. "Our entry into new markets when the dollar bounce. Weakened after a strong back," he said.

Until Friday (29 / 5), the rupiah was Rp 10,345 per U.S. dollar. If compared to the position per 1 December 2008 to Rp 12,400 per U.S. dollar, the rupiah has been much stronger.

Capital outflow can

If BI is not brake strengthening rupiah, Director of Danareksa Research Institute Purbaya Yudhi sadewa estimate, this weekend should menguat rupiah exchange rate in the range of Rp 9000-an per U.S. dollar.

Foreign exchange market practitioners Farial Anwar added that BI should not impede the strengthening of the rupiah because it could trigger capital outflow. Braking will make foreign investors view the dollar is expensive, so they make a profit by selling dollar assets. "The result they dibelikan dollar and rupiah drop again," he said


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