September 11, 2017 / 7:01 AM / 10 months ago

Indonesia says current rate undervalues rupiah, expects more weakening

JAKARTA, Sept 11 (Reuters) - Mirza Adityaswara, deputy governor of Indonesia’s central bank, said the rupiah’s current trading rate against the U.S. dollar, even after rallying for three days to strengthen by 1.3 percent, still undervalues the currency.

“An undervalued exchange rate is good to support manufacturing exports and to prevent unnecessary imports,” Adityaswara told reporters after a parliamentary hearing. The rupiah was trading at 13,160 per dollar at 0617 GMT on Monday.

In the hearing, Adityaswara told parliamentarians that Bank Indonesia expects the rupiah’s exchange rate to weaken to 13,420 a dollar at the end of this year and to further depreciate to 13,550 to the dollar by the end of next year.

He told reporters those projections took into account rising interest rates in the U.S. and in the Eurozone. (Reporting by Hidayat Setiaji; Writing by Gayatri Suroyo; Editing by Eric Meijer)

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