Wednesday, October 29, 2008

The Runaway Rupiah



Even thoug it is less than 30 % drop in Australian dollar, but this week saga has brought some panic in financial authority.

Will the ten steps help?

It was good policy and a detailed prescription. But we could not do it alone.

What needed now is real money put down the table by global institution or collection of economically strong states (east asia and middle east comes first to mind) saying they will help the country in need to protect exchange rate.


And by real money I am not referring to paltry USD 80 billion comitted at last ASEM meeting. Certainly not enough to scare off potential speculators.

I am disappointed that the amount was not even half the US bailout tag (USD 700 billion). Confidence to Indonesia's should is also headed south when our reserve shrunken more than 10 % (7 trillion rupiah) for Indover bailout.

This week will be a bumpy ride for rupiah. Hold on tight.

Addendum:
Indover is getting the bail out (click here) and rupiah is steady close to 11 thousand.
As Keynes said; "if one must forecast, forecast often." Especially true in this fast pace and changing policy



2 comments:

johnorford said...

i think the rupiah will ride this out. sure commodity prices have dropped, but i reckon the economy is gonna put in some stellar performance in the next few years. now all i gotta do is buy a few indonesian stocks...

fajar said...

salam kenal