Bank Indonesia: rupiah above Rp 11,500 already "overshoot"

Bank Indonesia: rupiah above Rp 11,500 already "overshoot"

Bank Indonesia Senior Deputy Governor Mirza Adityaswara said the exchange rate of the rupiah that is currently above Rp 11,500 per u.s. dollar is already experiencing greater turmoil than fundamentals that should or overshoot.

"If the rupiah exceeded Rp 11,500 it sudahovershoot," she said during a visit to Indonesia on Sunday.

Mirza describes the current value of the rupiah against the u.s. dollar in accordance with the condition of the national economy was amounting to Rp 9,000 – Rp 11,500 per u.s. dollar, as the rupiah at level can make exports more competitive.

"This Level is already suited to fix the problem on the balance of payments, because that level is enough to push down import and export more competitive," he said.

He added the increase in the value of exports and the reduction of the value of imports may decimate an already running transactions deficit run for 26 months, and are in the range of 2.5 percent of GDP in 2014.

"The numbers are supposed to be under 2.5 percent, we're not willing to make a surplus but the deficit a more reasonable deal went from current conditions," explained Mirza.

The deficit deal went have shrunk from the previous 4.4 percent against the GDP (9.9 billion u.s. dollars) in the quarter II-2013 be 3.8 percent of GDP (8.4 billion u.s. dollars) in the quarter III, and expected to reach 3.5 percent of GDP at the end of the year.

Mirza added one factor that lead to the weakening of the rupiah's value today is due to the worries of market participants regarding the possibility of "tapering off" by The Fed (US Central Bank).

According to him, the monetary stimulus or Quantitative Easing done The Fed since the end of 2008, making the dollars stay in the position of Rp 9,600 per u.s. dollar-over the last few years.

"The value of the exchange rate on 2011-2012 is not weakened, but the economic conditions of macro ratio at that time began to deteriorate, but the inflow came in because of the stimulus in the us. Are now so willing to pull a rollicking tapering, all bonds, "he said.

Mirza added volatility rate value is reasonable, and the rupiah which has come close to the value of Usd 12,000 per u.s. dollar level can go back to Rp 11,000 per u.s. dollar, if the problem is in the balance sheet transactions ' is resolved.

"Back to Rp 11,000 is not impossible, if the ratio of macro economy is healthy," he said.

The rupiah currency against the u.s. dollar, Friday afternoon, back in the positive area or strengthened to Rp 11.965 per u.s. dollar from the previous position of Rp 12.027 per u.s. dollar, though overshadowed the issue of deficit balance of transactions running Indonesia.