analysis of the end of the rupiah strengthening

 10/16/2009

The rupiah is expected to strengthen to an average level under Rp9.200 against the U.S. dollar at the end of 2009.

Fauzi Ichsan, as Senior VP & economist of Standard Chartered Bank Indonesia, said that the increase in exchange rate nialai driven by flushing the U.S. dollar by Washington, the Federal Reserve interest rates are not attractive, and the threat of inflation in the U.S..

Because the excess funds in capital markets, global stock markets until the end of this year and next year is still strong.

The increase in the Dow Jones through the psychological 10,000 level spurred positive sentiment in the national stock exchanges. Action to buy shares in the Indonesia Stock Exchange yesterday lifted the stock price composite index (JCI) 0.7% to as low as 2537.64.

However, because the action took profit discourage seed stocks rise, so the index at the second session rose only 3.66 points (0.15%) to the 2515.38 level. Business-27 index gained 0.52% to 229.39 level.

According to Fauzi Ichsan, supported the strengthening of the rupiah Indonesian economic performance that has a chance to position themselves as the G-20 third best in terms of economic growth. Fauzi estimate of Indonesia's export commodities based on next year is expected to improve due to sustained increase in product price projections.

Rupiah was trading yesterday at Rp9.330 level at 16.00 pm is lower than the Wednesday closing position still Rp9.375 per U.S. dollar. Domestic currency that could even touch Rp9.280, which is the largest reinforcement level since September 2008.

Finance Minister Sri Mulyani Indrawati said the increase in the exchange rate had a positive impact on the national economy, especially from the rate of inflation for goods that depend on imports.

However, the strengthening of the rupiah also negative implications for the economy, especially for international trade activities are the basis of revenues from abroad. The Government has and will attempt to maintain exchange rate stability and inflation for the medium and long term.

all this [the rupiah and inflation] is always like two-faced angel. There are negative and positive sides, but the government tried to stabilize.