Jakarta (ANTARA News) - Bank Indonesia (BI) Governor Darmin Nasution said the country`s rupiah currency would continue to strengthen until the end of the year although the appreciation would not be as high as in previous months.

"The recent depreciation was caused by a lot of factors such as European market or regional economic volatility. Do not be influenced by developments in the past one or two days. The tendency is the rupiah will still continue to appreciate although the appreciation will not be as high as in the months before," he said.

Darmin said the appreciation of the rupiah had increased the country`s foreign exchange reserves to US$116.5 billion until May 20.

Regarding worries about capital flight that could weaken the rupiah Darmin said that capital flight could happen in any country depending on the world`s economic conditions so that the country concerned needs to strengthening its economy internally.

"Do not worry too much about capital reversal. It is not that we have already prepared ourselves to prevent its impact," he said.

The rupiah exchange rate stood at between Rp8,561 and Rp8,584 against the US dollar this week or remained on a strengthening trajectory since two years ago.

Bank Indonesia earlier said that in line with the continuing strong inflow of foreign capital into the country the rupiah exchange rate tended to strengthen in April 2011.

In the month the exchange rate of the rupiah rose 1.68 percent (ptp) to Rp8,564 against the US dollar with volatility still under control.

The tendency is inseparable from investors` positive perception towards the country`s solid economic fundamentals.

Bank Indonesia views that the movement of the rupiah exchange rate is still in line with the central bank`s efforts to curb inflationary pressure and maintain the economic growth momentum.

So far the rupiah appreciation has not been considered bringing a negative impact on the domestic products` competitiveness so that exports are predicted to remain strong.(*)

H-YH/HAJM/A014

Editor: Jafar M Sidik
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