The Jakarta Post
Bank Indonesia (BI) is convinced that there is still room for the rupiah to strengthen again after the increase of subsidized-fuel prices.
'If the fuel price increase has a big impact on the reduction of energy needs, then it means that there is still room for the rupiah to strengthen,' said BI assistant governor Hendar after undergoing a BI deputy governor candidate screening at the House of Representatives in Jakarta, on Monday.
Hendar was also convinced that investors would not only take a look at inflation caused by the fuel price rise only weeks before Ramadhan, but also at the possibility of the rupiah getting stronger.
'The fuel price increase's effect on inflation is not too much as the basis is quite different,' said Hendar, as quoted by Antara news agency.
According to the Central Statistics Agency (BPS) data, inflation stood at 1.03 percent in June, up from June 2012 which stood at 0.62 percent, 0.55 percent in June 2011, 0.97 percent in June 2010 and 0.11 percent in June 2009.
Headline inflation contributed 1.03 percent to June's inflation while the core inflation contributed 0.32 percent to the month's inflation.
Therefore, Hendar urged the government and all financial authorities to arrange a proper response for the people so that their worries about the rise of transportation fares could be calmed.
'What we need to maintain is the 'second round' because in previous years, after three months, the situation improves again,' said Hendar. (ebf)
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