BI Indicates Protection for Weakening Rupiah

Jakarta (Antara Bali) - Bank Indonesia has indicated it would protect rupiah from losing its fundamental value amid external pressures on the national currency.

"We are always in the market  and keeping its fluctuations under control  and seek to keep the people's confidence in the currency," the central bank Governor Agus Martowardojo said here on Monday night.

 Agus said external pressure in the form of US dollar strengthening that follows improvement of that country's economic condition , has weighed on the currencies of developing countries including Indonesia. He said rupiah still fared better than many other currencies of developing economies .

He predicted rupiah would move around the range of three to five points plus  and minus  the target level of 12,500 per dollar set in the state budget for this year.

"Certainly this is in line with the global economic development, normalization of the Fed policy  and the demand for foreign exchanges every end of year," he said, adding it is still within reasonable level if rupiah weakened close to the level of 13,000 per US dollar.

When asked about the possibility of Bank Indonesia cutting its benchmark interest rate (BI rate) to follow the improvement shown in the country's inflation, he said it would depend on the latest economic data yet to be released.  (WDY)