BI SETS NO TARGET FOR RUPIAH'S EXCHANGE RATE

Jakarta, Oct. 9 (ANTARA) - Bank Indonesia (BI) has not set itself a target in maintaining the rupiah's exchange rate , according to BI Senior Deputy Governor Darmin Nasution.

"Our preference is that the local currency's volatility should not be too high in order to enable businessmen to predict the condition," Nasution said in response to a press question here on Friday.

An unstable exchange rate of the rupiah could make it difficult for businessmen to determine the amount of foreign currencies that they need, he said.

"A volatile exchange rate will make it difficult for the businesses. We know the fundamentals of the rupiah's exchange rate, but there is no target," he said.

The exchange rate of the Indonesian currency should also follow developments in regard to neighboring countries' currencies, he said.

"We should also pay attention to the currencies of neighboring countries, because we cannot play alone," he said.

Based on BI data, the middle rate of the local unit against the US dollar tended to strengthen within this week.

The rupiah strengthened up to Rp9,368 per US dollar on Thursday (Oct. 8), from Rp9,575 per US dollar last Monday (Oct. 5).

Although on Friday the local currency slightly weakened against the greenback to the level of Rp9,421 per US dollar, its position was still sound compared to last week.

The slight depreciation of the rupiah at this weekend was due to a US dollar rebound in Asian markets following a statement of Federal Reserve Chief Ben Bernanke saying that interest rates needed to be increased after the US economy had improved.
The Indonesian currency traded at Rp9,435-Rp9,445 per US dollar, down five points from Rp9,430-Rp9,440 per US dollar at the market's close a day earlier.

It was quite normal for the rupiah to slightly weaken after strengthening against the greenback over the past few days, Farial Anwar, a domestic money market observer, said.