Tuesday, September 17, 2013

Where the end of the Rupiah Crisis

Many countries considers Indonesia as well in 2008 Indonesia's economy did not fall deeper . It could be because of government measures taken are appropriate, including the Bank Century bailout , so it does not have an impact on other banks .

VALUE U.S. dollar ( U.S. ) strengthened against currencies around the world , including the rupiah . Rupiah slipped and lost control as a result of many factors . One is the effect of the tapering off Fed stimulus . However , the issue of vulnerable economic structure makes the rupiah lost " muscles " of his .

In late August 2013 the exchange rate reached Rp11.000 per U.S. $ 1 . Much speculation , not even a little panicked . Is the rupiah will be cornered ? Is this September rupiah will get worse or return to the numbers below 10,000 per U.S. $ 1 ?

No one can predict whether a crisis will happen again . Therefore , the crisis requires some sort of ignition . And , honestly it must be admitted , in the Indonesian economy much " fire " that would spark a crisis . Just need some sort of trigger , then immediately burn the capital market crisis , the financial markets , including banking , then crush the economy , such as the decline in economic growth . In the end the crisis will enter the phase of social crisis and political crisis .

Recognized global market conditions has experienced a slowdown due to the weakening of commodity prices , including the reduction of liquidity from the Fed . Indonesia 's current-account deficit ( CA ) which continues to widen due to the weakening of commodity prices . Trade deficit is a melancholy story is also thrilling novel .

The economic slowdown is likely to increase due to falling commodity prices relatively long since the European crisis occurred in 2010 . Domestic market of choice when we are not able to reach either of the export value . And , the shadow will remain high inflation a concern ahead of the uninterrupted rise in the price of fuel oil ( BBM ) subsidy .

Stock price correction due to abandonment by foreign investors also triggered a crisis - yield increase Government Securities ( SBN ) is putting pressure on the Indonesian economy . Well , due to deterioration in the global markets and the structure of the Indonesian economy is vulnerable to the crisis , the exchange rate so the butt and trigger the next crisis .

Rupiah could not resist the might of the U.S. dollar and the stock market collapse triggered a new round of the crisis in Indonesia. If so , what is needed is a policy that the rupiah crisis does not spread to the financial sector and banking . Therefore , history proves that the banking sector crisis is the easiest transmission .

In 1998 a major crisis fueled by foreign borrowing costs that are not offset by foreign exchange reserves . The time to reach a value of U.S. $ 1 Rp17.000 . When the state bail out the banks to reach Rp650 trillion .

Meanwhile , in 2008 the U.S. subprime mortgage crisis forced Indonesia to small . At that time investors lost Rp 2,000 trillion due to the stock market and the rupiah slipped through the numbers Rp12.000 per U.S. $ 1 . Only in the Bank Century bail out with money Deposit Insurance Corporation ( LPS ) Rp 6 , 7 trillion .

Many countries considers Indonesia as well in 2008 Indonesia's economy is not terjerembat deeper . It could be because of government measures taken are appropriate, including the Bank Century bailout , so it does not have an impact on other banks .

If not handled carefully , the crisis in the rupiah and the current stock price will continue and more widely . In contrast to 2008, the current President Susilo Bambang Yudhoyono ( SBY ) appeared to calm markets . Thus , the government also took measures to prevent the crisis does not spread and burn the banks , the economy , and politics of course .

As is known , the government through the Coordinating Minister for the Economy , Hatta Rajasa , delivering four new package of economic policies to maintain economic growth . The first package is to improve the current account deficit and the exchange rate against the dollar to boost exports and give tax breaks to certain industries .

The second package is to maintain economic growth . The Government will ensure that the budget deficit of the State ( the state budget ) in 2013 remained at 2.38% and secure financing .

The third package is to maintain purchasing power . Government in coordination with Bank Indonesia ( BI ) to keep the price volatility and inflation by changing the marketing of beef and horticulture , from import under the quota to import by relying on the price mechanism .

Meanwhile, the fourth package is accelerating investment . Government will streamline the integrated one-stop service system investment licensing . However , the business community did not directly assess this package can assuage dollars so the market is still on the big question mark .

More important than it is to restore market confidence by making statements that see the positive side of the economy . Do not let the trade ministers talk about how to grow horticulture and agriculture ministers talk about imported meat . Alternatively , a deputy central bank governor made ​​a statement that the banks have less liquidity .

Do not create panic market . The question , after the rupiah crisis , to which direction to move ? Sure , the days ahead is not easy for banks and investors and the economy . The fate of the rupiah still be parched and heaving with " rock and roll " .

Be careful to maintain liquidity . Because, usually , when this crisis , many banks are thinking about myself . If there are banks that are " hot - cold " , whether the government will dare to save him in the middle of a tendentious political wilderness ? This is the fit and proper test for the actual authority to handle the economy , banking , and monetary .

Not an easy road ahead . Let's keep the bank so as not to burn by the dollars and the associated impacts of the decline in the stock market .

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