Price Rupiah Weakens Could Disrupt Economic Community

Posted by Kama Yasa on 12th June, 2013

The weakening of the rupiah is happening in the ground water to penetrate 10,000 per USD must be overcome, if the economic fundamentals are not to be disturbed. Along with the weak rupiah, Jakarta Composite Index (JCI) and the securities market (SBN) will decrease.

According to Standard Chartered Bank economist Fauzi Ihsan, negative sentiment is so strong in the rupiah collapsed, government uncertainty related to rising fuel oil (BBM) is still a major factor.

"The government in this case should be firm, about fuel policy should be decided, because it concerns the confidence of investors as well, this uncertainty makes many foreign auto sales.

Fauzi explained, that the foreign investor has the name "Limit Potential Losses", where the limit is left unturned when it alien figure must sell. When foreigners sell them to buy the dollar, then the dollar will be higher.

"His job is how to make the government's rupiah attractive, why should withdraw if the rupiah weakened because inflation will rise, imports also rose, if the rupiah will not automatically attract foreign investors to sell, not just in the stock market, foreign exchange, government securities as well," said her.

Government in this regard, should maintain good fundamentals again, by immediately stopping the weakening rupiah happens, because when dollars back to normal then investor confidence will recover. Current investor confidence has begun to wane in line with the weakening rupiah.

"In this case there are four things that must be done by the government that is related to fuel, interest rates, intervention and related issues by a foreign bank acquisitions," he added.

Furthermore, the first related to fuel, in this case the government should be firm, whether the fuel is going up or not, because this is the moment where investors start losing confidence, because this will affect fiscal policy.

"It should be clear up or not, if that does not ride up how the policy will be taken in order to suppress foreign exchange reserves," he said.

In addition the second, like it or not BI must raise rates at least 1 percent interest Bungu Fasbi, it is interesting that dollars back again in the eyes of investors. The third central bank should intervene more aggressively in the forex market. Last foreign bank merger plan (Bank Danamon) must be resolved, because it involves the flow of foreign capital into the stock market.

"Right now we need foreign funds for our trade balance deficit conditions, if the surplus is not a problem, because if the merger occurs, the potential for a large inflow of foreign,

Last changed: 12th June, 2013 at 11:52 AM