External factors responsible for rupiah`s depreciation: President

"All factors have led to the downfall, especially the external factors," President said.
Jakarta (ANTARA News) - External factors have led to the current depreciation of the rupiah, President Joko Widodo stated here on Thursday.

After opening the 3rd Jakarta Food Security Summit at the Jakarta Convention Center (JCC), the president noted that the current depreciation of the rupiah against the US dollar was caused by external factors that had affected each other.

"All factors have led to the downfall, especially the external factors," he remarked while referring to the crude oil price and positive economic data from the United States, among other things.

With regard to the domestic conditions, the president assured that the fiscal conditions in the country are already favorable, and the inflation has also been brought under control while factors relating to the balance sheet have also shown a positive trend.

"However, it would take time (for the fluctuations to settle). I have only been a little bit more than three months in office," he stated.

He believed that the current condition of the rupiah would not last long and expressed optimism that Indonesias economy would continue to grow.

The Indonesian rupiah lost 148 points to close at Rp12,870 per US dollar on Thursday.

The fall was largely attributed to external sentiments arising due to the uncertainty surrounding Greeces debt problem, according to PT Platon Niaga Berjangkas financial market analyst Lukman Leong.

Market players tend to invest their money in safe currencies including the US dollar due to the Greek uncertainty that has resulted in the weakening of the rupiah, Lukman said.

However, there is a strong hope that Indonesias economic condition will improve and help the rupiah to strengthen and move in a positive direction.

He stated that there is optimism that Bank Indonesia would cut its benchmark interest rate (BI rate).

"Market expectation is that the central bank would cut its BI rate following a drop in the inflation rate that would boost economic development," he added.(*)