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peaking during a business dialogue at the Industry Ministry on Friday, several analysts agreed that it would hurt the economy if the rupiah exceeded 9,000 against the US dollar, even though as a whole a weaker rupiah would help exports.

If central bank intervention brought the rupiah below 8,900 to around 8,500, the Indonesian currency would be too strong for export growth expectations.

Banking expert Mirza Adityaswara said in Jakarta on Friday that a range of between 8,900 and 9,000 per US dollar would be the ideal level for the Indonesian currency.

At that rate, Indonesia’s products would remain competitive overseas, he said.

This strategy, he said, would help Indonesia cope with the possible decline in global demand due to the global economic slowdown.

“If the rupiah stays at a range between 8,900 and 9,000, it could also curb imports. This is important because we need to reduce imports in anticipation of crisis,” he said, adding that if the rupiah would further plunge to between 9,500 and 9,600, it would result in the inflow of more foreign goods because they would be much cheaper.

Mirza added that exporters with high export value, such as palm oil and coal exporters, could help the central bank in its effort to increase US dollar supplies in the country by keeping their export earnings in local banks.

By doing so, speculative trading in rupiah could be reduced and could in turn put the rupiah at an ideal level, he added.

Standard Chartered economist Fauzi Ichsan said that the rupiah would continue to fluctuate as fears of the possibility of a repeat of the 2008 global crisis still persisted. Given a worst case scenario, the rupiah could further plunge to as low as 9,500 this year, he said.

Fauzi, however, believed that the rupiah would recover to reach 8,500 by the end of this year.

During the meeting, Industry Minister MS Hidayat said the ideal rupiah level would range between 8,800 and 8,900 against the US dollar. “If the rupiah is stable at Rp 8,800 or Rp 8,900, it won’t allow us to import easily, while at the same time, we’ll still have margins for exports,” he said in response to the economists’ analysis.

The rupiah suffered its worst monthly drop since 2009 after global funds reduced holdings in the country’s assets over concerns that the global economic recovery is stalling, Bloomberg reported.

Rupiah dropped 3 percent this month, the most since February 2009, to 8,799 per dollar as of 4 p.m. in Jakarta.