GOVT TO KEEP WATCHFUL EYE ON WEAKENING RUPIAH

Jakarta, Feb 2 (ANTARA) - The government is to keep a watchful eye on the weakening of the rupiah which dropped to Rp11,665 per US dollar in the local money market on Monday, Coordinating Minister for Economic Affairs Sri Mulyani Indrawati said here.
"We will maintain a close watch on the rupiah, its volatility or deviations, to see whether it remains within a certain range, namely a range where adjustments can still be made in our state budget based business risk calculations," said Sri Mulyani who is concurently finance minister here Monday.
She said the government would make a comprehensive study of why the rupiah was weakening taking into account various other economic aspects.
"Every time a problem arises within a wide range in one day, we will see if a debt has matured or demand for imports has increased. But even around the world, adjustments are still being made, and therefore, we will possibly conduct the study not only on what happens day by day," she said.
The rupiah dropped 355 points (3.14 percent) to RP11,665 against the US dollar in the evening but only after it had earlier depreciated to Rp12,050.
Bank Indonesia Governor Boediono said the rupiah's depreciation was caused by global factors that had pressured the rupiah movement in the market and the central bank would remain on stand-by to intervene in the market.
"This happened because of US dollar fluctuations. Apart from that, it might also have been caused by domestic factors such as increased needs," he said.
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