Jakarta (Antara Bali) - Lawmaker Mukhammad Misbakhun said the rupiah volatility opening at the level of 14,695 per U.S. dollar on Friday indicated failure of the central bank to maintain the market confidence.
The Indonesian currency lost 15 more points from earlier level of 14,680 per dollar only two days after the government set the exchange rate target at 13,900 in the draft state budget for 2016, Misbakhun said in a written statement.
"All Indonesians have to accept the impact of the negative reaction of the market to Bank Indonesia with rupiah being under valued," he said.
The hardest hit is the manufacturing sector using imported basic materials that soared in prices, he said.
"The pressure on the country's economy would be heavier in 2016," he predicted .
He said he had from the beginning warned Bank Indonesia to be more realistic in setting the target for the rupiah exchange rate in the 2016 draft state budget.
The target should be more acceptable to the market to maintain the confidence of the market and the business sector, he said.
He said the instrument of the Bank Indonesia in its monetary policy is too conventional , not transparent carried out without good governance.
"It is no wonder that Bank Indonesia failed in its main duty of maintaining rupiah stability. I would not stop pushing the Parliament to send a letter to the Supreme Audit Agency (BPK) to audit the monetary policy of Bank Indonesia to protect rupiah," he said.
He said he was worried that the country's foreign exchange reserve would continue to shrink as Bank Indonesia has to spend big on market intervention in a futile attempt to shore up rupiah.
Meanwhile, market analysts said rupiah has lost more value against dollar on the absence of positive global sentiment.
"Other factors putting pressure on rupiah include projections that the country will continue to suffer economic slowdown, chief researcher of NH Korindo Securities Indonesia Reza Priyambada said here on Friday.
Reza said the statement by Bank Indonesia predicting that the country's economy would remain in the doldrums until the first half of 2016, as the country's current account balance and balance of payments are still in deficit.
"The expectation that the economy would improve is very low . Market intervention by Bank Indonesia would have only short term effect before progress is made in the spending of the state budget fund for infrastructure," he said.
Chief researcher of MNC Securities, Edwin Sebayang, said the pressure on rupiah come in the forms of external and internal sentiments.
"The main negative sentiment is the uncertainty in the US central bank's plan over its fund rate," Edwin said.
Internally , the Indonesian economic fundamentals had continue to be hit by slump discouraging investors to do business in the country, he said. (WDY)
