JAKARTA (Yosefardi) – Bank Indonesia (BI) said the rupiah is now back to its fundamental value after falling to Rp12,900 against the US dollar recently. The rupiah is said to approach its fundamental at level of Rp11,900-12,200 per dollar. This morning the rupiah was traded at Rp12,459 per dollar.
The financial market players have noticed about the fundamental economy of Indonesia, then the rupiah’s volatility is declining.
However BI said it opts to maintain the tight bias policy to ensure the rupiah’s stability. This option is an anticipation to prevent the migration of capital to United States (US) as its economy is now growing. The US also plans to raise its benchmark interest rate (Fed rate) next year.
BI also predicts the inflation would decline in January 2015 and trade deficit to decline by US$4 billion due to the fuel price hike.
The government’s commitment to cut fuel subsidy would help the rupiah to stabilize early next year. The government also plans to boost infrastructure at sea ports and foods through developing dam/reservoirs.
The government also needs to boost tourism sector to attract more visitors from overseas, to boost export of manufacture sector, while improving the country’s capacity in developing its foods and energy resources.