JAKARTA (Yoserfardi) – The rupiah returned to Rp10,970 against the US Dollar in spot market at 2.25 pm Jakarta time, according to Bloomberg data.
Rupiah teached Rp11,086 this morning but then improved to Rp10,905 at 1.00 pm Jakarta time. The currency weakened again to Rp11,058 ahead of the policy package announcement by the government.
Once the policy package was announced, the rupiah improved. That four policies are; First, effort to improve current account deficit and control the rupiah movement. Second, effort to maintain economic growth and public purchasing power. Third, effort to keep inflation, and fourth, effort to accelerate investment.
To address the current account deficit issue, the government will provide additional deduction tax for labor-intensive sector with export of minimum 30% of production.
The government will also reduce oil and gas import, increase tax on luxury goods such as CBU car and branded products, from current 75% to 150%, and improve export of minerals through procedures and quota relaxation.
In maintaining economic growth, the government will provide incentives by keeping fiscal deficit at range of 2.38%. For accelerating investment, the government will simplify license award through effectiveness of the function of one door/integrated services. (yohanneso@yosefardi.biz)