Rupiah nosedives on economic worries

The rupiah nosedived against the US dollar in the Jakarta interbank spot market, dropping below the level of Rp11,350 per US dollar as market players were worried over national economic growth.

The Indonesian currency traded at Rp11,363/11,377 per US dollar, down 53 points from Rp11,310/11,330 at the market`s close a day earlier.

Market players were pessimistic and worried that the Indonesian economic growth would continue to slow down, Edwin Sinaga, a money market analyst, said here on Friday.

The local currency was under pressure because investors preferred to keep the greenback, which they believed safer than the rupiah, he said.

He believed that Bank Indonesia (BI) would try to maintain the rupiah movement at between Rp11,200 and Rp11,300 per US dollar.

If the local currency continued to tumble to Rp11,500 per US dollar, it might approach the level of Rp12,000 per US dollar, he said.

The rupiah was under pressure also because of the report on the bad performance of the Indonesian exports in January 2009, which was only half of that in January 2008, he said.

However, he disagreed comparing the country`s exports in January 2009 with that of January 2008, when the national economic growth was better.