(News Today) - A Standard Chartered Bank (SCB) economist said the rupiah’s exchange rate is likely to strengthen to Rp8.800 per US dollar by the end of 2010 despite the economic crisis in Europe. Senior SCB economist Fauzi Ichsan said the impact of the financial crisis in Greece and similar turmoils in Portugal, Spain and Ireland was not expected to be as profound as the US crunch in 2008.
Speaking at a public discussion on the Greek financial crisis here Tuesday, he said the crisis in Europe was not as devastating as the one in the US two years ago, meaning that investors would continue to hunt assets in countries with good economic fundamentals such as in Asia. He said the rupiah would steadily appreciate along with an upward trend in the composite share price index at the Indonesian Stock Exchange (BEI).
"With the crisis raging in Erope, many investors will be attracted by the comparatively low share prices in Indonesia and this will eventually elevate the BEI composite share price index and consequently the rupiah," he said.
The BEI composite share price index would be driven up by predictions of a 6.2-percent growth in the Indonesian economy and increased profitability of domestic companies and banks.
"Last year, with the Indonesian economy growing 4.5 percent, about 85 percent of companies listed at the stock exchange posted profits. This year, economic growth is predicted to reach 6.2 percent so it is reasonable to expect they will reap even higher profits," he said.
About the current depreciation of share prices and the rupiah, Fauzi said, it was fluctuative in nature. "Investors are now still sticking to a ’wait and see’ attitude and invested their funds in the money market," he said.
But he was sure the global stock markets would become positive again along with the economic recovery process, and resurgent global prices of such commodities as crude oil, coal, palm oil although tbe processes would not be take place as fast as in 2007-2008.
Source : kompas.com
Wednesday, June 2, 2010
Rupiah Expected to Strengthen to 8,800
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