"I see the rupiah is currently on the declining trend."Jakarta (ANTARA News) - Bank Indonesia said it sets no target for the value of the country`s currency rupiah against the US dollar, but would continue seek to maintain the stability of the currency.
Basically, the rupiah value is dictated by the market mechanism of demand and supply, Hendar, the central ban`s monetary management director, said .
"I see the rupiah is currently on the declining trend," Hendar said here on Thursday.
He said Bank Indonesia takes into account a number of aspects in dealing with the volatility of rupiah such as the sustainability of the economic growth.
"We continue to follow the movements of the currency. There are factors prompting us to enter the market," he said.
However, the central bank would not set a certain level for rupiah exchange rate to keep room for the economic players to look for adjustment to rupiah value, he said.
What is more important for the central bank is how to manage the rupiah to prevent volatility from being too high, he said.
"We will try to convince the market that the rupiah depreciation would not cause wrong perception," he said.
He said the central bank could not alone cope with the rupiah depreciation by relying on existing monetary instruments.
"We still have room for fiscal adjustment thanks to the budget policy of deficit being not very big," he said.
The rupiah gained 35 points closing at 9,580 to the US dollar on Thursday afternoon from the level of 9,615 earlier.
The middle exchange rate of Bank Indonesia showed rupiah weakened to 9,590 from 9,580 per dollar.
In mid September 2012, rupiah strengthened at 9,450 when the US central bank announced its stimulus of quantitative easing III in a bid to shore up flagging US economy.
With the stimulus the Fed plans to inject US$40 billion a month to the market until the US economy improve and jobless rate declines.
(Uu.AS/H-YH/H-ASG)
Editor: Priyambodo RH
Copyright © ANTARA 2012
