||Asean Affairs 19 July 2013
Rupiah continues to lost value against the US dollar
The value of the Indonesian currency rupiah has continued to shrink on fear of potential cut by US central bank of financial stimulus.
Rupiah traded in inter-bank transaction on Thursday morning 10,060 weakening 30 points against the US dollar.
"The US dollar gained against rupiah this morning on expectation the Fed would cut its financial stimulus this year," Monex Investindo Futures` analyst Ariston Tjendra said.
The plan to phase out stimulus until next year is expected to continue by the Fed if the US economy showed signs of expanding, Ariston said.
The rupiah has continued to fall to almost four years low, but the government was more concerned with possible surge in inflation.
Bank Indonesia Governor Agus Martowardojo told reporters on Wednesday there was no need to worry about the exchange rate, saying his first concern is July`s inflation, which is predicted to exceed 2.38 percent.
"This is something we have to be wary about, but there are still a number of days until the end of July ," he said.
He said estimated inflation of 2.38 percent in July is still within controllable level in line with the revised 2013 state budget.
He warned, however, that inflation could surge again toward the end of the year.
Earlier, acting chief of the Finance Ministry`s Fiscal Policy Agency Bambang Brodjonegoro said he was not worried about rupiah falling to cross the psychological level of 10,000 per US dollar.
Bambang said the global economy is still hit by turbulence, adding "it is just a condition we have to face."
He said the possibility is still high of rupiah losing more value against the US dollar.
"In addition to global economic uncertainty, we are still fighting against growing inflation," he said.