Indonesia proposes broader use of renminbi in ASEAN

[Viet]

it's not about who would hinder us from using RMB. like your comrade says

just my response to your previous post! you said change the title and forget asean!

 

[Viva_Viet]

Yuan Devaluation Kicks Rupiah When It’s Down
Indonesian currency hits 17-year low, dragged down by weak exports, slow growth and now the PBOC

By
JAKE MAXWELL WATTS
Updated Aug. 13, 2015 3:33 p.m. ET
0 COMMENTS
Indonesia’s already-foundering rupiah slumped to a fresh 17-year low against the U.S. dollar this week after Chinadevalued the yuan, exacerbating problems for Jakarta policy makers.

The rupiah’s 9.7% fall this year—among Asian currencies, only Malaysia’s ringgit has performed worse—has dragged it to its lowest level since the 1997-98 Asian financial crisis. One dollar bought 13,710 rupiah as of Thursday morning in Asia, 1.4% more than at Monday’s close.

For the rupiah, already depressed by falling exports and economic growth at a five-year low, aweaker yuan hurts two ways, by making Chinese exports more competitive and by pushing up the price Chinese buyers must pay for Indonesian goods such as coal and palm oil.

Investors are also concerned about the effect on the rupiah of a U.S. interest-rate increase expected later this year. Rising U.S. interest rates would push up the value of the dollar, raising the cost of servicing Indonesia’s U.S.-dollar debt.

“Can it go higher, dollar against rupiah? It probably can. I see a lot of uncertainties in terms of where the dollar is heading in the summer,” saidChristy Tan,head of markets strategy and research atNational Australia Bank.“I think [Indonesian policy makers] should be more worried than they are currently expressing.”

Plummeting confidence in Indonesia’s economy is another factor in the rupiah’s weakness. It gives Indonesian exporters, for example, an incentive to hold on to foreign-earned dollars and a disincentive to trade in rupiah as the U.S. dollar appreciates.

Bank Indonesia and the government havetried hard to lift the rupiah. Last month the government said it would raise import tariffs on more than 1,000 items including clothes, food and cars, to encourage Indonesians to buy local goods in rupiah and spend less on imports, while BI banned the use of foreign currencies in domestic transactions. Economists suspect the central bank has intervened repeatedly in currency markets, selling dollars and buying rupiah. One thing it hasn’t done is raise interest rates, which could support the rupiah but also further constrain growth.

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But the rupiah continues to fall.

ENLARGE
The rupiah’s weakness is not actually contagious.PHOTOARREN WHITESIDE/REUTERS
Analysts say that the decline is inevitable, caused by market forces beyond policy makers’ control—but they add that poor execution of rupiah-supporting policies hasn’t helped.

Requiring that domestic transactions take place in rupiah, for example, should increase demand for the currency and encourage companies to convert their foreign earnings. In practice, though, the policy “created another issue, which is that it passes the buck of hedging to the local companies,” said National Australia Bank’s Ms. Tan. If a hotel, for example, can no longer accept payments in U.S. dollars but must continue to make purchases in dollars, it must look for other ways to protect itself against a falling rupiah. The policy has added other costs as well, as Indonesian companies scramble to set up new accounting mechanisms to cope with the changes.

Nonetheless, the practice of local companies transacting with each other in U.S. dollars must stop, Bank Indonesia senior deputy governorMirza Adityaswaratold The Wall Street Journal in response to a request for comment.

“Now, the question is, Can we immediately change the practice that has been in place for 30 to 40 years? Certainly not. It takes time,” he said.

Other policies carry their own problems. The plan to raise tariffs “has in some senses undermined foreign-investor sentiment,” saidClaudio Piron,co-head of Asia rates at Bank of America Merrill Lynch. And it may have only limited success in pushing consumers to buy domestic, since Indonesian producers are currently unable to fulfill local demand for many goods.

But if policy makers have been unable to arrest the rupiah’s decline, Mr. Piron added, they have at least succeeded in reducing its volatility.

Philip Wee,senior currency economist atDBS,agrees. “If you think in terms of stopping [the rupiah’s fall], then you will come to the conclusion that [central-bank policy] is not effective,” he said. “If it’s a managed depreciation, that is understandable, given the climate.”

Yuan Devaluation Kicks Rupiah When It’s Down - WSJ
ID economy got hit hard when CNY down, why you guys still proposes broader use of CNY ?? ID want to see others ASEAN economies go down together with ID when CNY down again ??

 

[Huan]

Yuan Devaluation Kicks Rupiah When It’s Down
Indonesian currency hits 17-year low, dragged down by weak exports, slow growth and now the PBOC


Yuan Devaluation Kicks Rupiah When It’s Down - WSJ
ID economy got hit hard when CNY down, why you guys still proposes broader use of CNY ?? ID want to see others ASEAN economies go down together with ID when CNY down again ??

Didn't your VND currency also went down? lol

 

[Viva_Viet]

Didn't your VND currency also went down? lol

Yep, VND down ,too. But our necessaries price like food, medicine dont go up. It also help Vn remain stable export while CNY down make ID economy get worse with higher food price and higer inflation rate (as I know, its 7 % now)

 

[Reashot Xigwin]

Yuan Devaluation Kicks Rupiah When It’s Down
Indonesian currency hits 17-year low, dragged down by weak exports, slow growth and now the PBOC


Yuan Devaluation Kicks Rupiah When It’s Down - WSJ
ID economy got hit hard when CNY down, why you guys still proposes broader use of CNY ?? ID want to see others ASEAN economies go down together with ID when CNY down again ??

OMG we got a moron ova' hier!

Indonesia has proposed a broader use of China's renminbi in ASEAN's trade and investment to counter the impact of stronger US dollar.

 

[Viva_Viet]

OMG we got a moron ova' hier!

ID should get out of ASEAN as she wish now, we dont wanna have a sinking economy in our region
Is Indonesia Turning Away From ASEAN Under Jokowi? | The DiplomatIs Indonesia Turning Away From ASEAN Under Jokowi? | The Diplomat

 

[pr1v4t33r]

ID should get out of ASEAN as she wish now, we dont wanna have a sinking economy in our region.
Is Indonesia Turning Away From ASEAN Under Jokowi? | The DiplomatIs Indonesia Turning Away From ASEAN Under Jokowi? | The Diplomat

ASEAN is Indonesia's backyard, whatever we do, ASEAN stay with us.

 

[Bennedict]

Indonesia doesn't have ambitions to challenge China.

Indonesia only wants to become another major regional power,

He's going to get an earful from the US

I do wonder though, is it me, or does it seem Indonesia is quite pro-China? At least not rabid anti-China like Vietnam. It seems Indonesia has a policy of military/political neutrality and does whatever is best for it's economy, meaning good ties with China. Good for Indonesia. Got to get that large 250 million population up and running. Islands and silly 'alliances' be damned.

Well bro nice said, but China should compete with Japan to bring us out both Japan and China wants Indonesia to join their sphere.

Indonesia's main export partners

Japan 14.8%

China 12.4%

Singapore 9.1%

United States 8.6%
(2013 est.)

Main import partners

China 16%

Singapore 13.7%

Japan 10.3%

United States 4.9% (2013 est.)[8

China has also been one of Indonesia’s key major trading partners in recent years, serving as the country’s largest export and import market. By 2010, China had managed to overtake the United States as Indonesia’s second-largest export destination after Japan reaching USD 14.0 billion. China is also becoming Indonesia’s most important source of imports, reaching USD 19.6 billion in 2010. The balance however was in favour of China as Indonesia booked trade deficit USD -4.7 billion in 2010.[10]

According to a 2014 BBC World Service Poll, the opinion of China among Indonesians remains strongly positive and stable, with 52% of positive view compared to 28% expressing a negative view.[1]

According to a 2014 BBC World Service Poll, 70% of Indonesians view Japan's influence positively, with 14% expressing a negative view, making Indonesia one of the most pro-Japanese countries in the world.[3]

 

[Indos]

Too many import from tiny Singapore, we import too much from their oil refinery. As we try to build more oil refinery or using direct oil import using G to G scenario with Gulf countries the import figure should go down rapidly regardlees Singapore position as a hub of some other products trading

 

[Viet]

ASEAN is Indonesia's backyard, whatever we do, ASEAN stay with us.

don't bullshit too much dude

 

[Viet]

Too many import from tiny Singapore, we import too much from their oil refinery. As we try to build more oil refinery or using direct oil import using G to G scenario with Gulf countries the import figure should go down rapidly regardlees Singapore position as a hub of some other products trading

that tells the whole story: singapore is economically more important than you.

 

[pr1v4t33r]

don't bullshit too much dude

shit, just shut up.

 

[Viva_Viet]

don't bullshit too much dude

No need to add insult to injury, bro. its economy is dying with inflation rate 7%, much higher than growing rate due to CNY down.

Because all investors like JP-Taiwan-Sing are coming to VN to get the benefit from TPP deal and help VN to get rich, of course none TPP nations like ID have no choice but to seek help from other none TPP nation like CN. Bad thing is that instead of receiving help from others none TPP nations like CN, the fall of CNY hit ID economy so hard ....

 

[Viet]

shit, just shut up.

how about a deal? we both shut up. I'm not going to mention your country indo, while you stop making remarks about vietnam and asean.

by the way, in case you don't know our mekong neighbors laos, cambodia, thailand and burma on the indochinese mainland are more important than asean. We have established a bloc. The gang of five. haven't you noticed the numerous summits between the mekong club with other great powers in the world, from america to china to japan? without your participation. eitherway, you can continue living in your delusional world. I don't care.

 

[Viva_Viet]

how about a deal? we both shut up. I'm not going to mention your country indo, while you stop making remarks about vietnam and asean.

by the way, in case you don't know our mekong neighbors laos, cambodia, thailand and burma on the indochinese mainland are more important than asean. We have established a bloc. The gang of five. haven't you noticed the numerous summits between the mekong club with other great powers in the world, from america to china to japan? without your participation. eitherway, you can continue living in your delusional world. I don't care.

Wow, I love the name 'The gang of five'

In 'The gang of five', only VN is TPP member and soon will get full investments from USA-Japan, wow, I think we will have a chance to become big bro of 'The gang of five'