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View all search resultsThe rupiah's persistent depreciation is a structural consequence of over-reliance on volatile capital inflows to finance a chronic current account deficit, persistent saving–investment imbalances, lasting fiscal deficit and a narrow, commodity-dependent export base.
The rupiah extended its slide to 17,425 per US dollar on Tuesday, according to the Jakarta Interbank Spot Dollar Rate (JISDOR), underscoring Southeast Asia’s largest economy’s struggle to halt the currency’s decline since early this year.
The year is already so jarring that many in markets barely have time to digest one seismic news event from Washington before another one hits. But a dollar risk premium appears to be rebuilding regardless, most clearly in last week's sudden swoon.
Finance Minister Purbaya Yudhi Sadewa says pushing the rupiah exchange rate back up to 15,000 per United States dollar should not be that difficult as the currency is undervalued when taking into account Indonesia’s economic fundamentals.
Gold surged past US$5,000 per ounce early on Monday following a turbulent week where tensions over Greenland and Iran rattled sentiment, while markets remained on tenterhooks after a rout in bonds and violent spikes in the yen.
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