Quote:
Originally Posted by hendri2
walau...rp is going up (down lah) daily....7550 @ 10.00am...no time, it will reach 8000...cheong, ah!!! bros....
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Bro hendri,
Indonesia could be facing a deficit in its economy. It should reduce the deficit, or else the debt will increase and might end up like Greece. (bankrupt)
The currency exchange rate fluctuations are decided by the currency's supply and demand. If everyone has no confidence and sell them, the exchange rate will fall. Another situation is when a country have not enough fund and keep on printing money, this will also cause the currency to depreciate.
The following could be the reasons why the rupiah has been depreciating against other currency:
1) The outflow of capital due to lack of confidence and the reduction of business opportunities have caused enterprises and businesses to invest abroad.
2) Particularly when other countries are lowering their interest rates, Indonesia still keep its interest rate high. This may affect the stability of the currency value and make it volatile.
3) The tax structure could be one of the cause. Particularly the high corporate tax is a barrier to attracting investment.
Thailand adjusted its corporate tax from 30% to 23% this year, and 20% next year. But will indonesia reduce its corporate tax also ?
4) Revenue of the country reduced. Fall of international crude oil prices, oil revenues will shrink. Since there are alot of unemployment in indonesia, only a minority of people are paying income tax. Country expenditure has been increasing day by day and deficit is more likely to expand rather than reduce.
5) Foreign debt is high. To fund construction projects of infrastructure, with no foreign reserve, Indonesia has to borrow money.
