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ept. 18, Online

Bank Indonesia (BI) has moved to assuage market concerns over the steep depreciation of the rupiah, predicting that the '€œundervalued'€ currency would strengthen after it overshot the psychological threshold of 12,000 per US dollar on Thursday morning.

According to the Jakarta Interbank Spot Dollar Rate (JISDOR), the rupiah weakened 122 basis points during Thursday morning'€™s trade to 12,030 per dollar, its weakest level since February.

'€œIf [the rupiah'€™s] volatility increases, BI will remain watchful of the market to offer an additional supply of dollars,'€ BI Senior Deputy Governor Mirza Adityaswara said via a text message on Thursday.

Your comments:

Based on the background of president-elect Joko '€œJokowi'€ Widodo and vice president-elect Jusuf Kalla, they seem to favor an undervalued rupiah to propel the real economy.

I don'€™t expect any rupiah appreciation once they are inaugurated. Even after the subsidy on fuel is lifted, which would help to boost the rupiah, I think they intend to have the rupiah undervalued but stable.

H Cahyadi

This is totally on President Susilo Bambang Yudhoyono, not Jokowi. SBY has refused to deal with the fuel subsidy, which is and has been affecting the current account balance for years. SBY has left a poison pill for Jokowi.

Jokowi will be good for Indonesia, but the short term pain will be great to undo a decade of mismanagement.

HB Mccoy

RI will easily survive the pending fall of the US dollar into oblivion as the non-aligned countries of the world adopt a common, non-US dollar, '€˜reserve'€™ currency and mandate also that trade be conducted in domestic and non-used currency.

Depreciation against the US dollar is good domestically (ask China).

Olmet

Welcome to the revival of the mighty American economy! Blame anyone you want, but it'€™s hard to compete with American ingenuity.

Kortslete

Please, spare me the blame game. All those you mention already existed when the pundits painted an optimistic picture of Jokowi being elected.

Jokowi promised a lot of hope for change and only produced fading hope and not a lot of change.

If Jokowi has the guts to raise fuel prices, why did he '€œborrow a hand to punch'€ by asking SBY to do it for him? The benefit would be the same, but the risk?

Still fresh in my mind is how financial analysts optimistically predicted that the rupiah would appreciate considerably to Rp 11,000 per US dollar if Jokowi was elected president.

Now it seems it is as elusive as Jokowi'€™s campaign promises.

Estear

It has nothing to do with Jokowi'€™s election.

It has more to do with SBY not having the guts to raise fuel prices (i.e. by removing subsidies), the continued ban of minerals and the government'€™s refusal to admit a mistake, the ongoing Churchill Ming Ltd vs. government of Indonesia lawsuit, the continuous speculation on capping foreign ownership of oil palm plantations at 30 percent, the capping of foreign investors'€™ ownership of hydro power plants greater than 10 MW to a maximum of 49 percent and the speculation of having coal mines pay export taxes before exporting.

All these are SBY'€™s farewell present to Indonesia. Jokowi just has the bad luck to be on the receiving end.

BI is using foreign factors as an excuse. The main cause of the rupiah'€™s depreciation is poor management of our own economy.

Malam

I hope after Jokowi gets into office the rupiah will continue to appreciate.

Let us see if you tell the truth. I'€™m waiting until after Oct. 20.

Tutkukap

In every political campaign, you must promise to fulfill an expectation. Joko could fulfill his promise to better the Indonesian economy by cutting the ridiculous generalized subsidies.

I agree, though, that selected subsidies could be implemented for the poor and the needy, so you need a management free of corruption.

This is the cancer of the Indonesian political elite and to get rid of this bunch of corruptors takes time and time is money wasted on this issue.

Animi

There is no magic '€” the hard policies will be difficult to swallow and easy game for people more concerned with themselves than the nation.

The optimism for Jokowi is that we feel he is clean. He will, however, have a hard task undoing the wrongs the current administration have done when the House of Representatives are so scared of his push on corruption.

Only if the people are behind him will this come to pass '€” I say again there is no magic.

Duncan Tan