Indonesia plans to strengthen rupiah assumption at budget

08:51, April 12, 2011      

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The Indonesian government would revise down rupiah assumption at the state budget this year as an effort to ease imported inflation following greater capital inflows.

Bambang Permadi Sumatri, head of the fiscal policy of finance ministry said on Monday that the government plans to trim assumption of rupiah at this year budget from the initial figure of 9,250 to 9,000.

As the rupiah has appreciated to the level of 8,600 per one U.S. dollar recently, Bambang said that the assumption of 9,000 was a safe level for the currency.

"So the decrease from 9,250 to the level of 9,000 (make rupiah at) a safe level," he said at Coordinating Minister for Economy Office here.

Previously Indonesian central bank has decided to allow further appreciation of rupiah since its rose interest rate by 25 basis points to 6.75 percent in February, as an effort to ease impact of greater capital inflows. The recent appreciation of rupiah had significantly affect on the country's exports, as the trade surplus was still small, said Sumatri. The country's cumulative exports by February was at 29 billion U. S. dollar, slightly higher than imports of 24.56 billion U.S. dollar at the period, according to Statistic Agency. The country' s export contributes to 32 percent of the nation's GDP growth.

Sumatri also said that the government planned to revise up assumption of oil price at this year state budget which was at 80 U.S. dollar per barrel, following the soaring of global oil price which has exceeded 100 U.S. dollar a barrel after the political turmoil in the Middle East and catastrophe in Japan. Indonesia is a net-oil importer country.

Source: Xinhua
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