|
|
Change Your Life! |
Indonesia's rupiah devaluates |
|
News
|
|
|
July 6, 2000
JAKARTA (AP) - Indonesia's currency, the rupiah, hit a 16-month low Wednesday, pushed down by fears of escalating violence and political uncertainty ahead of the annual meeting of the country's highest legislative body. In trading Wednesday afternoon, the rupiah hit 9,355 to the dollar, about 30 percent weaker than the government counted on for its annual state budget. The currency, which government budget planners had expected to stabilize at about 7,000 to the dollar, has been sliding for the past two months. Although a weak rupiah helps Indonesia's exports by giving them a competitive advantage, it also makes it harder to repay the country's dlrs 150 billion in external debt. The latest battering came on Wednesday when an unexploded bomb was found at the attorney general's office. On Tuesday another bomb ripped through parts of the prosecutor's office only moments after one of former president Suharto's sons was questioned in relation to a corruption investigation. No one was hurt in the blast, but it sparked panic among many offshore currency traders afraid that it may signify an escalation of violence across the world's fourth most populous nation. Indonesia's national police chief said it was not clear who was behind Tuesday's bombing, but he did not rule out the possibility that Suharto's son, Hutomo "Tommy" Mandala Putra, may be involved. Senior government ministers have accused Suharto's supporters of inflaming religious violence in the Maluku islands, where about 3,000 people have been killed in the past 18 months, in an attempt to destabilize President Abdurrahman Wahid's nine-month-old government. The rupiah also nose-dived on Monday, as an impending showdown looked certain between Wahid and several senior legislators who he accused of inciting violence. Wahid was quoted by several newspapers as saying that he had instructed the police to investigate the lawmakers. He then later reportedly told journalists that he had ordered the police to detain several "provocateurs" and hold them until the end of the annual meeting of the country's highest legislative body, the National Consultative Council, in August. On Tuesday, Wahid tried to diffuse rising tension in the country by saying he had been misquoted and never intended to take on the lawmakers. But there is fear in the money markets, that Wahid may be forced from office in August by lawmakers, frustrated over his inability to quell the violence in the Malukus and other parts of the sprawling Southeast Asian nation. Some legislators also have accused Wahid's administration of being incapable of fixing the country's battered economy as it tries to recover from its worst crisis in a generation. |