JAKARTA - The government and Bank Indonesia must take immediate steps to halt the downward movement policy of the rupiah against the US dollar.
The influence of the US dollar against the Indonesian economy is very large, because the national economy is more widely supported by domestic factors, while the current account deficit widened. The weakening of the rupiah continued to occur can hit players in the domestic market.
According to Senior Economist, Fauzi Ichsan, in his presentation as a speaker at the event titled Monex Investors Club 2015 in Jakarta, Saturday, March 14, 2015, weakening rupiah over the fundamentals.
"When compared to when the last financial crisis, the US dollar upward movement now occurs gradually but surely," said Fauzi.
While the weakening of the rupiah against the US dollar in 1997-1998, 2001, 2005 and 2008, said Fauzi, is triggered by the financial crisis that is temporary.
The weakening of dollars that have occurred since 2013, he said, is fundamental for the current account deficit is so large.
"The only way to stop the weakening rupiah in the next six months is through a fundamental change," said Fauzi.
To that end, he said, Bank Indonesia and the government should lower the current account deficit before the US central bank, the Federal Reserve, decided to raise its benchmark interest rate.
"If the current account deficit remains large, it is difficult for dollars to be able to withstand the pressure of the US dollar. BI can do massive intervention to stop the weakening rupiah, which has the potential to continue to sag to Rp13,500 per US dollar in the near future, from the current position which is in Rp13.200 range, "he said.
He also mentioned that in order to stabilize the rupiah, the government should immediately realize the infrastructure development and poverty alleviation programs run.
The influence of the US dollar against the Indonesian economy is very large, because the national economy is more widely supported by domestic factors, while the current account deficit widened. The weakening of the rupiah continued to occur can hit players in the domestic market.
According to Senior Economist, Fauzi Ichsan, in his presentation as a speaker at the event titled Monex Investors Club 2015 in Jakarta, Saturday, March 14, 2015, weakening rupiah over the fundamentals.
"When compared to when the last financial crisis, the US dollar upward movement now occurs gradually but surely," said Fauzi.
While the weakening of the rupiah against the US dollar in 1997-1998, 2001, 2005 and 2008, said Fauzi, is triggered by the financial crisis that is temporary.
The weakening of dollars that have occurred since 2013, he said, is fundamental for the current account deficit is so large.
"The only way to stop the weakening rupiah in the next six months is through a fundamental change," said Fauzi.
To that end, he said, Bank Indonesia and the government should lower the current account deficit before the US central bank, the Federal Reserve, decided to raise its benchmark interest rate.
"If the current account deficit remains large, it is difficult for dollars to be able to withstand the pressure of the US dollar. BI can do massive intervention to stop the weakening rupiah, which has the potential to continue to sag to Rp13,500 per US dollar in the near future, from the current position which is in Rp13.200 range, "he said.
He also mentioned that in order to stabilize the rupiah, the government should immediately realize the infrastructure development and poverty alleviation programs run.
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