As we still export raw materials and rely on imports ..."Jakarta (ANTARA News) - Devaluation was not the best solution for Indonesia, Governor of Bank Indonesia (BI) Agus DW Martowardojo stated here on Monday.
"Currency devaluation similar to that carried out in other countries will not be successful if it is done in Indonesia as the country still relies on primary imports and exports," he pointed out.
He noted that devaluation could be implemented in countries whose economies are based on production processes, or nations that produce natural resources and their derivative products.
Indonesia currently has a 50-50 ratio in terms of production, and even its primary needs are still dependent on the export-import sector since the natural resources it exports are in the form of raw materials.
"As we still export raw materials and rely on imports, hence devaluation will not have a positive impact on the country," he emphasized.
The Chinese central bank has devalued the yuan by almost two percent to the US dollar to encourage market reform.
This dramatic step has shocked the market and triggered the sale of shares in the United States, European, and several other commodity exchanges.
Vietnam has also decided to widen the span for its currency trading in interbank transactions from two to three percent.
Moreover, the State Bank of Vietnam has announced a hike in the average interbank exchange rate by one percent from 21,673 dong per US dollar to 21,890 dong.
(Reporting by Afut Syafril/Uu.H-YH/INE/KR-BSR/A014)
Editor: Priyambodo RH
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