WEBODIGY Business & Finance Journal

BANDUNG – Rupiah inserted into ten groups of the weakest currencies in the world. This is caused by fluctuations due to the volatility of the rupiah by many speculators.

This was revealed by the Director of Currency Management Group (CMG) Farial Anwar, now a journalist workshop on economic and monetary BI & Monetary Instruments Foreign Exchange Market, in Bandung, West Java, on Friday (5/12/2008).

He mentioned that, from 10 eyes of the world’s weakest currency, the rupiah is ranked sixth after Vietnam and Saubomi. The first rank in the occupied by Zimbabwe, followed by Somalia and Turkmenistan.

Farial explained, poor rupiah volatility due to very large, which is currently down sharply compared to other currencies.

In December 2007 compared to December 2008, the rupiah fell 28 percent from the level of Rp9.000 to Rp12.000 per U.S. dollar.

“Unlike the Thai currency Bath, in December 2007 compared to December 2008 only down five percent from 33.69 to 35.55 Bath Bath per USD,” he said.

Bad predicate rupiah, when it was recognized by the Bureau of Monetary Policy Hendar BI. However, he stressed in previous years, the rupiah has also been achieved as the best currency.

Farial added, there are some very simple reasons volatile rupiah against the U.S. dollar, such as free foreign exchange regime, the system of freely floating exchange rate, forex loans, and dependence on large U.S. dollar.

In addition, Farial also revealed, the placement of foreign funds in SBI also be a factor weakening rupiah. Therefore, steps anticipation of weakening rupiah happens, all derivative transactions undertaken by the company must have its underlying transaction.

However, with restrictions on the purchase of dollars with no underlying transaction up to USD 100 thousand per month, this policy affects the dollar to decrease speculation.

“Why let in foreign kok SBI, SBI but not for domestic monetary management, let alone we must also pay interest to foreigners, it is better for society,” he said

U.S. dollar biggest losses recorded since November against the major partner currencies after falling unemployment is fueling speculation the Federal Reserve continued stimulus program.

Sterling is the only currency weakened against the dollar this week after PM Gordon Brown clashed with the opposition Conservative party about the budget deficit.

Greenback weakened from the highest position on the 4-month yen encouraged by the prospects of the economy’s largest country. Last week, the reports said U.S. retail sector growth slows further.

“Investors are disappointed and removing the U.S. dollar, market expectations seem too big,” said Hidetoshi Yanagihara, senior currency trader Mizuho Corporate Bank Ltd. in New York.

Dollar Index, which records the movement of U.S. dollars to euros, yen, and pound, down 0.5% to 77.471 yesterday, from 77.860 on January 1. The index touched the highest since September 78.449 on December 22.

Labor Department reports on U.S. companies cut 85,000 employees during December. While the median estimate of 76 economists said there was no change in the labor sector. The unemployment rate held at the level of 10%.

“The main news is not siding with the U.S. dollar. Perpetrator market flat in a position that caused the Fed’s expectations remain cool,” said Brian Kim, currency analyst UBS AG in Stamford, Connecticut.

The dollar weakened 0.4% to 92.66 yen this week, the first decline in 5 days since December 11. The dollar also weakened 0.6% to U.S. $ 1.4409 per euro, from U.S. $ 1.4324. Euro strengthened the yen at 133.46 from 133.20.

Pressure against the U.S. dollar to below the level of U.S. $ 1.45 reduced after reports of new jobs during 4000 November.

Japanese currency strengthened against the dollar yesterday after the Prime Yukio Hatoyama said the speed of exchange rate movements are not good after the new Finance Minister Naoto Kan insists no problem with the weakening yen.

The yen rose to its highest level in 14 years on the U.S. dollar in November that threatens earnings exporters including Toyota Motor Corp. and Sony Corp..

U.S. dollar biggest losses recorded since November against the major partner currencies after falling unemployment is fueling speculation the Federal Reserve continued stimulus program.

Sterling is the only currency weakened against the dollar this week after PM Gordon Brown clashed with the opposition Conservative party about the budget deficit.

Greenback weakened from the highest position on the 4-month yen encouraged by the prospects of the economy’s largest country. Last week, the reports said U.S. retail sector growth slows further.

“Investors are disappointed and removing the U.S. dollar, market expectations seem too big,” said Hidetoshi Yanagihara, senior currency trader Mizuho Corporate Bank Ltd. in New York.

Dollar Index, which records the movement of U.S. dollars to euros, yen, and pound, down 0.5% to 77.471 yesterday, from 77.860 on January 1. The index touched the highest since September 78.449 on December 22.

Labor Department reports on U.S. companies cut 85,000 employees during December. While the median estimate of 76 economists said there was no change in the labor sector. The unemployment rate held at the level of 10%.

“The main news is not siding with the U.S. dollar. Perpetrator market flat in a position that caused the Fed’s expectations remain cool,” said Brian Kim, currency analyst UBS AG in Stamford, Connecticut.

The dollar weakened 0.4% to 92.66 yen this week, the first decline in 5 days since December 11. The dollar also weakened 0.6% to U.S. $ 1.4409 per euro, from U.S. $ 1.4324. Euro strengthened the yen at 133.46 from 133.20.

Pressure against the U.S. dollar to below the level of U.S. $ 1.45 reduced after reports of new jobs during 4000 November.

Japanese currency strengthened against the dollar yesterday after the Prime Yukio Hatoyama said the speed of exchange rate movements are not good after the new Finance Minister Naoto Kan insists no problem with the weakening yen.

The yen rose to its highest level in 14 years on the U.S. dollar in November that threatens earnings exporters including Toyota Motor Corp. and Sony Corp..

The economic recovery is unfolding in the United States, but it remains fragile and setbacks are possible. In Europe, sovereign concerns are still weighing on the Euro currency, albeit the manufacturing and service sectors are expanding further into the growth territory.

Signs of recovery are adding up in the United States, even though consumes are still weak and credit tight. In November, industrial production rose 0.8% from the expected 0.5% gain. This time, the advance was broad-based with about 80% of total industries registering some profits. Mining and manufacturing led the way, while vehicles and parts moved up 1.8%, after having declined in October. Finally, utilities output fell 1.8%. Capacity utilization increased instead to 71.3% from 70.6% in October. It was the highest level since December of last year and the fifth straight month of recovery, but still far away from the level of productivity seen during the credit era. New orders activity and the increase of foreign demand, will keep the positive momentum going in the next months as well. However, the recovery should be bumpy and set backs are possible, albeit the housing market might continue its positive trend. Housing starts rose almost 9.0% month-on-month in November, pairing most of the decline (10.1%) from the previous month, and moving real close to the positive territory on a year-on-year basis for the first time in many months. As a result, the Gross Domestic Product (GDP) should build up nicely during the fourth quarter of this year, after having been practically flat so far.

Angelo Airaghi is a Commodity Trading Advisor, registered with the National Futures Association and the Commodity Futures Trading Commission. He has been an active professional since 1990 working for major international financial companies. In the past 10 years, Angelo Airaghi has been an analyst and commentator for national and international media.

Rupiah inserted into ten groups of the weakest currencies in the world. This is caused by fluctuations due to the volatility of the rupiah by many speculators.

This was revealed by the Director of Currency Management Group (CMG) Farial Anwar, now a journalist workshop on economic and monetary BI & Monetary Instruments Foreign Exchange Market, in Bandung, West Java, on Friday (5/12/2008).

He mentions, from 10 eyes of the world’s weakest currency, the rupiah is ranked sixth after Vietnam and Saubomi. The first rank in the occupied by Zimbabwe, followed by Somalia and Turkmenistan.

Farial explained, poor rupiah volatility due to very large, which is currently down sharply compared to other currencies.

In December 2007 compared to December 2008, the rupiah fell 28 percent from the level of Rp9.000 to Rp12.000 per U.S. dollar.

“Unlike the Thai currency Bath, in December 2007 compared to December 2008 only down five percent from 33.69 to 35.55 Bath Bath per USD,” he said.

Bad predicate rupiah, when it was recognized by the Bureau of Monetary Policy Hendar BI. However, he stressed in previous years, the rupiah has also been achieved as the best currency.

Farial added, there are some very simple reasons volatile rupiah against the U.S. dollar, such as free foreign exchange regime, the system of freely floating exchange rate, forex loans, and dependence on large U.S. dollar.

In addition, Farial also revealed, the placement of foreign funds in SBI also be a factor weakening rupiah. Therefore, steps anticipation of weakening rupiah happens, all derivative transactions undertaken by the company must have its underlying transaction.

However, with restrictions on the purchase of dollars with no underlying transaction up to USD 100 thousand per month, this policy affects the dollar to decrease speculation.

“Why let in foreign kok SBI, SBI but not for domestic monetary management, let alone we must also pay interest to foreigners, it is better for society,” he said.