Rupiah Tumbles 1.01 Percent Againts US Dollar

Jakarta (Antara) - The Indonesian rupiah tumbled 1.01 percent against the US dollar on Wednesday evening on rising concerns about the country's current account deficit. The rupiah traded at 11,884 per dollar in the Jakarta interbank market on Wednesday evening, compared with 11,765 per dollar the day before. The Indonesian currency came under pressure and even fell to a record low of 11,800 per dollar as money market participants grew concerned about the country's current account deficit, said Ariston Tjendra, chief researcher at Monex Investindo Futures. "Sentiment toward the rupiah has not improved. Worries about the current account deficit are still high. Imports may slow down. However, exports are expected to increase enough to boost market confidence in the economy," he added. The dollar continued to appreciate against the rupiah following reports that the US Federal Reserve would reduce its monetary stimulus soon. Finance Minister Chatib Basri said on Wednesday that the rupiah is in the process of moving to a new equilibrium, or new trading levels, before the Fed announces that it is winding down its monetary policy measures, known as quantitative easing. The Indonesian economy operated without any help from the US stimulus program in 2009. However, in the past four years, developing nations, including Indonesia, have enjoyed the benefits of Federal Reserve stimulus in the form of increasing foreign capital inflows and an appreciation in the value of their currencies, including the rupiah. "In a normal world, we would not have quantitative easing. The United States will eventually withdraw its policy whether we like it or not," he pointed out. (*)