ID :
27134
Tue, 10/28/2008 - 19:47
Auther :
Shortlink :
http://m.oananews.org//node/27134
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RUPIAH ALREADY OVERVALUED : OBSERVER
Jakarta, Oct 28 (ANTARA) - The rupiah has so far been overvalued against the US dollar so that its exchange rate has continued to undergo pressure, a banker and observer, Paul Sutaryono, said.
He said besides being overvalued the weakening of the rupiah was also caused by the high extent of 'hot money' in the money market so that Bank Indonesia (BI/the central bank) had to intervene to save the rupiah.
"BI has to protect the rupiah by market intervention. BI still can do it because it still has 57.47 billion foreign exchange reserves in US dollar," he said here on Tuesday.
The rupiah value nosedived to Rp12,000 per US dollar in Tuesday.
He said that market intervention was a better step than raising the benchmark interest rate which would trigger an increase in bank interest rates.
"An increase in interest rates can cause a rise in banks' non-performing loans (NPLs), particularly loans extended under the KPR (house-ownership credit) scheme," Suatryono said.
He said banks had to be smart to see this trend. "It can be a time bomb if national banks are not cautious," he added.
President Susilo Bambang Yudhoyono said the government would on Tuesday issue a policy to prevent the rupiah's exchange rate from continuing to weaken.
On Tuesday afternoon, the rupiah's exchange rate had dropped to 11,800 against the US dollar, he said.
"Because today the rupiah has fallen to more than Rp11,000, we are immediately going to take the measures which have been studied by Bank Indonesia and Finance Minister Sri Mulyani," President Yudhoyono said at a press conference at his office on Tuesday.
He said besides being overvalued the weakening of the rupiah was also caused by the high extent of 'hot money' in the money market so that Bank Indonesia (BI/the central bank) had to intervene to save the rupiah.
"BI has to protect the rupiah by market intervention. BI still can do it because it still has 57.47 billion foreign exchange reserves in US dollar," he said here on Tuesday.
The rupiah value nosedived to Rp12,000 per US dollar in Tuesday.
He said that market intervention was a better step than raising the benchmark interest rate which would trigger an increase in bank interest rates.
"An increase in interest rates can cause a rise in banks' non-performing loans (NPLs), particularly loans extended under the KPR (house-ownership credit) scheme," Suatryono said.
He said banks had to be smart to see this trend. "It can be a time bomb if national banks are not cautious," he added.
President Susilo Bambang Yudhoyono said the government would on Tuesday issue a policy to prevent the rupiah's exchange rate from continuing to weaken.
On Tuesday afternoon, the rupiah's exchange rate had dropped to 11,800 against the US dollar, he said.
"Because today the rupiah has fallen to more than Rp11,000, we are immediately going to take the measures which have been studied by Bank Indonesia and Finance Minister Sri Mulyani," President Yudhoyono said at a press conference at his office on Tuesday.
