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Post-amnesty rupiah appreciation likely, but 'only for short time'
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Analysts have said that the tax amnesty could lead to strong appreciation of the rupiah to Rp 10,000 per US dollar, but an economist with Bahana Securities says if that happens, it won't last for too long. (Antara/Rosa Panggabean)
A
n economist with Bahana Securities predicts that a strong appreciation of the rupiah after the tax amnesty is possible but it will only last for a brief period.
According to economist Fakhrul Fulvian at the state-owned enterprise, the appreciation may not reach Rp 10,000 to the US dollar like other analysts have predicted, but such a strong appreciation is possible if the amount of repatriated funds reaches more than US$4.7 billion.
"That amount is our current account deficits, if that amount or more comes in at the same time it will reverse our current account and a strong appreciation is possible. But a strong appreciation will be followed by increasing imports that will counter it back," he told thejakartapost.com on Thursday.
The government has predicted that total repatriated funds could reach Rp 1 quadrillion (US$76.05 billion), with Coordinating Economic Minister Darmin Nasution predicting that most of the funds will arrive in September as taxpayers sought the cheapest tariff.
According to Trimegah Securities analyst Angga Aditya Assaf, the taxpayers' preferable instrument for repatriated funds is property if they must keep their funds onshore for at least three years
"To find a good property will need time, until then they will put their money in the bank or in short-term money market instruments," Angga said.
