High Capital Inflow, Why Rupiah Collapsed

Not only the performance of the economic team of Jokowi-JK cabinet who got the spotlight, similar thing also happens at the central bank. Exchange rates collapse of Rupiah is still above the level of IDR 13,000 per USD is assessed as a failure of Bank Indonesia to keep monetary conditions within the country.

Bank Indonesia accused slowly overcome the weakening of the Rupiah. Economist IPB and Megawati Institute, Imam Sugema said the Governor of Bank Indonesia, Agus Martowardojo should resign for failure to maintain the stability of the exchange rate of the Rupiah. His calculations, the Rupiah should have been in the position of IDR 11,500 per USD.

The flow of foreign funds (capital inflow) short-term and long-term entry to Indonesia since the beginning of the year is so great. Unfortunately this momentum is not used up by the central bank.

New look of the influx of foreign funds, foreign exchange reserves increased to USD 5 billion. In Bank Indonesia note, it looks foreign exchange reserves late February 2015 rising to USD 115,52 billion. It should be the Rupiah strengthened because the high capital inflow.

In addition, the visa exemption policy for certain countries and the application of the Letter of Credit (L/C) for natural resource products judged useless. That step is believed to be no will make the Rupiah is stronger than ever.

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