Economist: Rupiah to Reach New Equilibrium at Rp13,000 per Dollar
16 March 2015 13:36 WIB
TEMPO.CO, Jakarta - Economist Fauzi Ichsan said that weakening of Rupiah against US Dollar is not because of a crisis, citing Indonesia’s bad economic fundamental as one of the causes.
Fauzi also said the current weakening Rupiah is different from the one happening in 1997 and 2008. At that time, he said, the weakening was caused by a crisis and the currency weakened in a relative short time. When the crisis was over, rupiah moved to its equilibrium.
"Currently, the weakening happens gradually but surely," Fauzi said on Saturday in Jakarta.
"The current weakening of Rupiah is not because of a crisis but because of the bad fundamental,” he said, adding that the said fundamental factor is the big current deficit account experienced by Indonesia. Indonesia’s import values are also bigger than its export values and this is what made demand for US dollar at home is big.
Fauzi estimated that although in a short term period Rupiah can continue to weaken to 13,500 per US Dollar, in the long term, it will reach a new equilibrium, which is Rp13,000 per US Dollar.
AMIRULLAH