The rupiah that sag is like fruit simalakama for investors. For exporters of course, the more profit, but instead importers stump

Darmin Nasution

Gita Wirjawan

Chatib Basri

The rupiah that sag is like fruit simalakama for investors. For exporters of course, the more profit, but instead importers stump

The rupiah that sag is like fruit simalakama for investors. For exporters of course, the more profit, but instead importers stump. Throughout 2012, Bank Indonesia (BI) noted that the exchange rate depreciated by 5.91 per cent (yoy) to Rp 9638 per U.S. dollar. However, the year-to-date until the end of this week, only rupiah depreciated 0.2 percent to Rp 9660 per U.S. dollar.

Global Head of Forex Research Callum Henderson of Standard Chartered Bank forecast that the possibility of rupiah also going through the level of Rp 10,000 per U.S. dollar in the first half of 2013. It is anticipated that the value of Indonesia's trade balance deficit further. If so, then the rupiah will continue to depreciate the inside. This could be a threat, but it can also be an opportunity for investors as well.

According to Callum, Indonesia's trade deficit by the end of 2012 (especially November 2012) is the highest in the world. This causes further decline of the rupiah exchange rate of foreign currencies, particularly the U.S. dollar. However, according to Callum, the trade balance deficit is not too much of a problem for Indonesia. Therefore, the deficit created by the decline in exports of Indonesia. What's more, 65 percent of Indonesia's exports are commodity export prices fell in the majority world.

"It's a cyclical (associated cycle) alone. Gradually, commodity prices will improve, exports also improved, and the trade balance will also be surplus. Imbasnya dollars will also be strengthened," said Callum.

So he predicts will come back stronger rupiah at Rp 9,500 per U.S. dollar in mid-to late 2013.

Head of the Investment Coordinating Board (BKPM) Chatib Basri rate, weakening of the rupiah is not regarded as something that is worrying. "Because it so potential advantages for importers. This could also encourage the import of certain products that this country needs," he said.

According Chatib, from the point of weakening rupiah investors of course this would be an opportunity as it can help them to the needs of repatriation. "So the dollars are not always alarming. I'm optimistic, liquidity in the market is still very heavy," he said.

This is evidenced by Indonesia's economy mengontribusikan 48 percent of the economy in ASEAN. In the matter of population, the population of Indonesia has reached 42 percent of the population of ASEAN. Under these conditions, the Indonesian market is very promising, both provide for their own domestic market, and the market for foreigners to enter Indonesia.

Trade Minister Gita Wirjawan also explain similar things. The weakening of the rupiah is also increasing imports in the country. "Throughout 2012, the import of raw material for capital rises 10-12 percent. This will continue to happen in 2013," said Gita.

Indeed, the condition of imports compared to exports strengthening this will push the trade balance in the country. But according to the Gita, it is not the cause of the rupiah depreciated. "The rupiah fell was triggered by negative sentiment from government policies, political sentiments about labor issues.'s What little influence the view the world and caused the rupiah to weaken," said Gita.

Governor of Bank Indonesia Nasution has a different view. According to him, the rupiah depreciated because it is associated with a worsening global economic conditions, particularly in Europe, which contributed to the decline of foreign portfolio inflows into Indonesia.

According to Nasution, from the domestic side, the rupiah pressure from high demand for foreign exchange for import purposes amid slowing exports. The rupiah exchange rate moves back stable in the fourth quarter 2012 due to an increase in foreign capital inflows were large enough, either in the form of portfolio capital inflows and foreign direct investment.

Going forward, Bank Indonesia will continue to maintain the stability of the exchange rate in accordance with the economic fundamentals. The Bank Indonesia will continue to intervene, especially when the exchange rate is through the level of fair value.

"Indeed, our trade balance was highlighted by the market players. But yes it is, there is a taking, no one thinks this is temporary. So yea yea various investors," Nasution said.

Danareksa Research Institute chief economist Purbaya Yudhi Sadewa said the movement of the exchange rate is currently judged to be fair. The movement is already above the average analyst prediction market. According to him, in comparison with other currencies, the nominal exchange rate is weaker than 5 percent on average in 2010. In 2011, the rupiah continued to weaken and continued in 2012, which was also influenced by global conditions. However, if the exchange rate is always above Rp 9,500 per U.S. dollar, the exchange rate is considered high.

"In fact, at fair value (fair value) of Rp 9,300 per U.S. dollar," said Purbaya.

Currently, the exchange rate is estimated to have been below the average estimate (undervalued) by 4-5 percent. However, there are still opportunities for the rupiah to strengthen in the near future. Conditions weakening of the rupiah today, said Purbaya, affected sentiment worsening balance of payments, specifically the current account or the current account due to slowing exports. The imports are still growing quite rapidly.

Another thing that contributed to these conditions is uncertain resolution of Europe's debt crisis so there is still a safe-haven investors are doing. Similarly, inadequate intervention by Bank Indonesia, which is different from the August-September 2011.

"While the liquidity of the U.S. dollar is also limited due to the limited repatriation of placement instruments and the limited export foreign currency funds in the country," said Purbaya.

So, depending on market participants. The weakening rupiah would instead be used as a threat or an opportunity?