The Indonesian rupiah followed the Brazilian real in decline. The reason for the drop was the same: Forex traders were unconvinced by efforts that the central bank was making to revive the nation’s economy.
The Indonesian current account deficit was the record $9.8 billion last quarter of this year. To address the issue, Finance Minister Chatib Basri announced last week that the government will offer tax reduction for exporters, while the Bank Indonesia is going to increase supply of foreign currencies on the local market. Traders did not feel that the news made the Indonesian currency more appealing. Some economists explained that the problem is not with the measures themselves, but with the fact that it will take time for them to start working.
USD/IDR rose from 10,775.0000 to 10,850.0000 as of 18:10 GMT today.
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