"The rupiah exchange rate will decline maximally to Rp9,100 per US dollar and then strengthen again to be lower than that. Compared to the 2012 budget assumption it will indeed weaken because it was set before the crisis happened. So, the rupiah is expected to average between Rp8,900 and Rp9,000 per US dollar in the year," BI deputy governor Hartadi A Sarwono said after attending a CEO Forum here on Monday.
He said the economic crisis in Europe had spurred capital outflows and this would make the rupiah to depreciate until next year.
"We do not know yet when the European crisis would end. But in 2012 the balance of payment is expected to be surplus to give a positive impact on rupiah movement," he said.
He said the implementation of the recording of foreign exchange revenue from exports as of January 2012 would also help the central bank maintain the stability of the rupiah.
He said although the rupiah exchange rate started to decline as of September due to an economic crisis in Europe but on a yearly average it still appreciated 0.68 percent compared to its position at the end of 2010.
With regard to dealing with the European crisis BI had prepared
two strategies namely maintaining the stability of the rupiah exchange rate and the price of state securities (SBN) by selling foreign currencies needed by investors and channeling the proceeds in the rupiah to the SBN.
The policy has shown positive results as the price of SBN had not dropped sharply although a lot of foreign investors released their holdings while the rupiah exchange rate had not fluctuated too much because BI supply of foreign currencies was enough to meet demand.
Ahead with the foreign reserves standing at US$111.32 billion Hartadi said the ammunition for maintaining the stability of the country`s monetary and financial system was large enough, especially it was also supported by the balance of payment which was also still surplus of around US$5 billion.
Under such conditions he said the country`s economy next year would still grow at between 6.3 to 6.7 percent.
(Uu.H-YH/O001)
Editor: Priyambodo RH
Copyright © ANTARA 2011
