The biggest problem faced by Indonesia now was imports, which were still larger than exports, especially oil imports, which must be reduced, BI Senior Deputy Governor, Mirza Adityaswara, said.Jakarta (ANTARA News) - Bank Indonesia has called on the government to improve macro-economic conditions in a bid to reduce pressures on the rupiah exchange rate.
"Currencies in countries that still have macro-economic problems, including Indonesia, have suffered pressures but those in countries whose macro-economic problems have been solved the pressure is lighter," the central banks senior deputy governor, Mirza Adityaswara, said at the BI compound here on Friday.
He noted that the biggest problem faced by Indonesia now was imports, which were still larger than exports, especially oil imports, which must be reduced.
"One way to reduce oil imports and reduce the budget deficit is reducing the oil subsidy, and one of the options is to raise the fuel oil price," he said.
On Thursday, the rupiah exchange rate surpassed the Rp12,000 level against the US dollar.
Mirza said this happened due to the US Federal Reserve Bank�s plan to raise its interest rate.
"The hike in the US interest rate will probably happen in the fourth quarter next year, but it is not impossible for it to happen in the second quarter next year. So, repositioning of funds is currently going on in the world with managers putting funds into developing countries. They are conducting repositioning after they saw the trend of US interest rates, which may rise soon, and again later in the future," he said.
On Friday the rupiah was traded up to Rp11,982 per US dollar.
Mirza said Bank Indonesia had always been in the market and ready to intervene because the countrys financial market was not yet mature enough and remains vulnerable to the impact of global economic changes.
"A thin market will be easily affected by fluctuations, and if that happens Bank Indonesia must provide additional supplies. Therefore, if big fluctuations happen, Bank Indonesia is certainly in the market," he said.(*)
Editor: Heru Purwanto
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