"I repeat, continued increase in rupiah exchange rate is not always good for the country," Senior Deputy Governor of Bank Indonesia Mirza Adityaswara said.Jakarta (ANTARA News) - Bank Indonesia said it would not allow the countrys currency rupiah to grow too strong as a result of the growing inflows of foreign exchange.
Repatriation of fund parked abroad by many Indonesian tax payers is growing under the tax amnesty program offered by the government.
Senior Deputy Governor of Bank Indonesia Mirza Adityaswara said here on Thursday, the rupiah exchange rate has to be kept proportional with the fundamental condition of the domestic economy.
One indicator of domestic economic fundamentals is current account balance, he said, adding, currently, the country still has current account deficit.
Therefore, Indonesia needs competitive exchange rate of rupiah that it could stimulate exports and curb imports, he said.
"I repeat, continued increase in rupiah exchange rate is not always good for the country," Mirza said.
Toward the end of the first period of the tax amnesty program when the redemption funds and fund repatriation grew rapidly , rupiah continue to strengthen to reach the level of 12,900 per U.S. dollar from a level of more than 1,300 per dollar from early this year.
This year until Sept 29 , rupiah appreciated 6 percent or an average of 12,945 per dollar. This is stronger than the level set 13,000 per dollar used in calculating the state budget.
Despite the appreciation, rupiah has not been free from external pressure . Varying monetary policies of advanced nations and uncertainty over the decision of the U.S Central on its fund rate still are shadowing the rupiah movements.
"Rupiah is not immune to the impact of the movements of global currencies. When China devalued its yuan in January this year, rupiah tumbled, so was when Britain decided to pull out from the European Union in June," Senior Economist of the DBS Group Research, Philip Wee cited. (*)
Editor: Heru Purwanto
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