ID :
23255
Wed, 10/08/2008 - 15:27
Auther :
Shortlink :
https://www.oananews.org//node/23255
The shortlink copeid
RUPIAH TUMBLES TO NEARLY 9,600 DESPITE BI KEY RATE INCREASE
Jakarta, Oct. 8 (ANTARA) - The rupiah tumbled to nearly 9,600 per US dollar in the Jakarta interbank spot market on Wednesday morning, although Bank Indonesia has raised its key interest rate or BI Rate by 25 basis points to 9.5 percent.
The rupiah traded at Rp9,580/9,585 per US dollar, a decrease of 15 points from Rp9,565/9,657 per US dollar the day before.
BI raised the BI Rate to prevent the rupiah from slumping further as the Indonesian currency fell to Rp9,700 per US dollars on Tuesday morning, according to foreign exchange analyst Rully Nova of PT Bank Himpunan Saudara Tbk here on Wednesday.
The BI Rate was raised to curb the rupiah's volatility in the short term and to anticipate an inflation rate surge, he said.
The central bank, BI, also intervened in the money market so that the rupiah's plunge could be anticipated and its rate returned to the previous level of Rp9,500 per US dollar.
"We are optimistic that the rupiah can return to its previous level as the US financial crisis is easing following the approval of the US$700-billion bailout package by the US Congress," he said.
However, he said, the bailout package alone would not be adequate to cope with the financial crisis affecting the US and Europe. Cooperation among central banks in many countries was needed, he said.
The rupiah tumbled due to the market's panic as market players bought dollars, he said. However, he predicted that the market pressure would just be temporary following the decision of BI to raise its key rate.
Rupiah would strengthen again when foreign investors put their money back in domestic market as the rupiah offered higher interest rate than dollars, he said.
He believed that foreign investors still considered Indonesia one of Asa's potential markets.
The rupiah traded at Rp9,580/9,585 per US dollar, a decrease of 15 points from Rp9,565/9,657 per US dollar the day before.
BI raised the BI Rate to prevent the rupiah from slumping further as the Indonesian currency fell to Rp9,700 per US dollars on Tuesday morning, according to foreign exchange analyst Rully Nova of PT Bank Himpunan Saudara Tbk here on Wednesday.
The BI Rate was raised to curb the rupiah's volatility in the short term and to anticipate an inflation rate surge, he said.
The central bank, BI, also intervened in the money market so that the rupiah's plunge could be anticipated and its rate returned to the previous level of Rp9,500 per US dollar.
"We are optimistic that the rupiah can return to its previous level as the US financial crisis is easing following the approval of the US$700-billion bailout package by the US Congress," he said.
However, he said, the bailout package alone would not be adequate to cope with the financial crisis affecting the US and Europe. Cooperation among central banks in many countries was needed, he said.
The rupiah tumbled due to the market's panic as market players bought dollars, he said. However, he predicted that the market pressure would just be temporary following the decision of BI to raise its key rate.
Rupiah would strengthen again when foreign investors put their money back in domestic market as the rupiah offered higher interest rate than dollars, he said.
He believed that foreign investors still considered Indonesia one of Asa's potential markets.
