Rupiah Tops Rp18,000 per Dollar, Minister Rejects 1998 Echo
The government is preparing closer fiscal-monetary coordination to attract inflows and preserve banking liquidity.
The rupiah briefly fell past Rp18,000 per U.S. dollar in trading on Thursday (4/6), stoking fears of a repeat of the 1997-1998 crisis. Finance Minister Purbaya Yudhi Sadewa said the current situation is different because fiscal conditions and Indonesia's economic fundamentals remain strong. He said the pressure on the currency is driven more by negative sentiment than by damage to the economy's foundations.
The government is now preparing tighter coordination with Bank Indonesia to bolster the rupiah. Measures under discussion include making domestic financial instruments more attractive to encourage foreign capital inflows and maintaining money market and banking liquidity through government cash placements at BI with higher remuneration. Purbaya said the synchronization could also reduce production costs for businesses that rely on imported raw materials.