As unstable as a nation is, the more its currency is likely to depreciate. And Indonesia is reportedly feeling the exact impact on its currency, the currency is the Rupiah (IDR).
The rupiah plunged one percent, to 10,230/U.S. dollar within minutes of the blast in two Jakarta hotels that killed 9 people. It is really a regretful event as Indonesia is currently undergoing an election that resounding gives the president Susilo Bambang Yudhoyono a strong mandate. Rupiah138 We hope this will accelerate reforms within the biggest economy in Southeast Asia and strengthen the Indonesian Rupiah.
Following after the Bali accident, Indonesia has not seen an explosive blast in many years. Comparatively to the incident in Bali in 2004, the Indonesian people are better prepared this time round and are more responsive to media coverage, treating of the wounded, and also the move on factor that sees people continue their daily routines as normal.
Therefore, while the blast is an incident that could cause a slight damage in the Indonesian Rupiah, Indonesia’s economic fundamentals are robust. Unlike Singapore where there has been an increase in growth, Indonesia is still able to grow their economy at about 3.5 percent despite their financial/economic crisis , and this trend is likely to continue.
Thus, the Indonesian Ripiah (IDR) is expected to stabilise and strengthen over time against the US Dollar (USD). After the tragic bomb explosion in Jakarta and the Rupiah has been able to recover some of its losses. Currently, $1 U.S. dollar compares to 10101 Indonesian rupiahs. The Indonesians can be optimistic that the Indonesian Rupiah (IDR) could trade at or below 10,000 levels. It’s possible that it will happen very soon or if another bomb blast happens.