Rupiah Nears Seven Month Low

The rupiah, which is leading the Asian currencies’ decline against the US dollar, is now close to its lowest level in seven months.
According to Bloomberg, the rupiah declined further yesterday by 1.6 percent to Rp 8,945 per US dollar, from Rp 8,935 per US dollar recorded last February 11.
Bank Indonesia (BI) said that the eurozone debt crisis is the main driver behind the rupiah’s declining trend. It is projected that the crisis will continue to pressure Asian currencies until a solution is found, according to Perry Warjiyo, the Director of Economic Research and Monetary Policy at BI.
“The market is still wary of the eurozone debt crisis. Asian currencies, including the rupiah, will remain pressured. Bank Indonesia has been actively controlling the circulation of the rupiah,” said Gundy Cahyadi, an economic expert of the Oversea-Chinese Banking Corp in Singapore.
In addition to monitoring the rupiah, BI also implemented measures to curb the rupiah volatility. BI, according to Perry, does not only watch the rupiah’s daily movement, but also the long term trend.
Perry also said that Bank Indonesia still has enough foreign exchange reserves to intervene with the rupiah's depreciation. As of Friday, forex reserves stand at US$ 122 billion.
The Jakarta Stock Exchange on Monday’s trading closed down 80.13 points (minus 2.09 percent) to 3,755.05