04 Sep 2018 01:23PM (Updated: 04 Sep 2018 01:30PM)
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JAKARTA: Indonesia's coordinating minister for economic affairs on Tuesday (Sep 4) called the rupiah's depreciation since Friday "illogical" and said it did not reflect the state of the economy.
"There were things that pushed the depreciation further, that we think makes it illogical. We're looking to find out why beside Argentina's problem," Darmin Nasution, a former central bank governor, said meeting President Joko Widodo, cabinet ministers and the Bank Indonesia chief.
Nasution told reporters the government had spotted speculative trading of the rupiah and also said there had been technical problems with dollar-rupiah quotations last week.
The rupiah hit its weakest in three years on Friday and this week has reached its lowest point in 20 years. Tuesday's quote of 14,897 a dollar was 1.42 per cent below the Aug 30 closing.
On Monday, finance minister Sri Mulyani Indrawati said Indonesia expects prolonged market pressure due to souring emerging market sentiment resulting from Argentina's economic woes.
"We are monitoring global dynamics and need to be vigilant because the dynamics caused by the sentiment on Argentina is very high. The situation there is not yet finished, so we're anticipating these dynamics will continue," the minister told reporters after a meeting with President Joko Widodo and the central bank governor.
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Indrawati repeated the government's plans to reduce onshore dollar demand by controlling imports, including through higher import tariffs on consumer goods.
Source: Reuters/mn
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