Rupiah Weakening Not to Affect Investment

Jakarta (Antara)- Head of the Capital Investment Coordinating Board (BKPM) Chatib Basri said the weakening of the rupiah exchange rate against the US dollar would not disturb investment activities in Indonesia. "The weakening of the rupiah is expected not to disturb investment because it is temporary in nature," Chatib said after a working meeting with Commission VI of the House of Representatives (DPR) here on Wednesday. Chatib who is also the finance minister said he was optimistic that although the rupiah was weakening the investment target in 2013 set at Rp390 trillion would remain to be achievable. He said that the government was still assuming the rupiah exchange rate at the Rp9,600 level against the greenback. The DPR budgetary body has decided the state budget deficit for 2013 at 2.3 percent which is smaller than the government's proposed 2.48 percent. "The macroeconomic condition is not disturbed by the rupiah weakening so that investors and other economic players still have enough rooms to do their activities," said Chatib. After all, he said, more prudent fiscal policies were expected to create stronger confidence for the market. The value of the rupiah in foreign exchange market has been over the last two days declining. In Tuesday's trading, the rupiah closed at a range of Rp9,830 against the US dollar after it reached Rp10,000 per US dollar in the spot market. A number of analysts said that the fall of the rupiah was more caused by uncertainties in the realization of the government's plan to raise subsidized fuel prices. Chatib said the government was sure to raise the prices of subsidized fuels. It was now at the stage of popularization and preparations where the government would provide social assistance (to the poor who would be affected by the policy). "So, there is no need for the market to worry about it. Deliberations at the Parliament are also going on well," Chatib said. (*)