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Bank Indonesia Encourages Rupiah to Depreciate

June 25, 2014 at 11:55 by Vladimir Vyun

50,000 and 100,000 Indonesian rupiah billsThe Indonesian rupiah fell today as the nation’s central bank signaled that it encourages weakness of the currency as it should help local exporters and improve the trade balance.

Mirza Adityaswara, Senior Deputy Governor of the Bank Indonesia, said yesterday that the currency should be temporarily “undervalued” to improve competitiveness of nation’s exports and reduce imports. This should reduce the trade balance deficit, which was biggest since July. The trade gap, in turn, weighs on the current-account balance.

USD/IDR went up from 11,990 to 12,090 as of 11:54 GMT today, reaching the high of 12,094 intraday.

If you have any questions, comments or opinions regarding the Indonesian Rupiah, feel free to post them using the commentary form below.

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