"It is not only this time rupiah being vulnerable to change in exchange rate," Darmin said.Jakarta (ANTARA News) - Coordinating Minister for Economy Darmin Nasution said rupiah is vulnerable to instability in exchange rate as the countrys economy uses large foreign funds.
"It is not only this time rupiah being vulnerable to change in exchange rate," Darmin said here on Tuesday.
Rupiah has always been volatile as the countrys economy uses large foreign funds, he said citing, up to 38 percent in state bond compared to only 13 by Thai economy.
A larger proportion is even recorded in shares with foreign investors dominating traded shares by 60 percent, he added.
With high proportion of foreign funds in the economy, a slight jolt in the economy could disrupt rupiah stability, he said.
However, Darmin said, the country still needs foreign funds especially foreign investment.
"Our savings are small. Therefore, we need foreign fund , not only for investment but also to buy state bonds," he said.
He said currently the government encourages capital spending in a bid to push up economic growth.
At the same time the government is seeking to draw foreign investors to help finance large projects, he said.
Meanwhile rupiah remained weak though closing stronger at the level of 14,020 per U.S. dollar gaining from earlier level of 14,049. (*)
Editor: Heru Purwanto
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