INDONESIAN CENTRAL BANK'S FX POLICY: JISDOR & SISMONTAVAR 2013
Indonesian central bank's FX policy of JISDOR and SISMONTAVAR leaving the Bank of Indonesia to manage the USD/IDR with the Federal Reserve Bank of New York and the price of IDR to other currencies are dependence on the price of USD to other currencies managed by the Federal Reserve Bank of New York and her counterpart central banks. Leaving Indonesian central bank to limit the task for managing the USD/IDR together with Fed. Res. Bank of New York since 2013.
Accordingly, the pricing of IDR with other major and non-major currencies are measured on the basis of USD/IDR and USD/other currencies (extreme pegged).
This model of FX Policy could be replicated by all other developing countries by allowing the Federal Reserve Bank of New York to assist the management of the FX stability, the world's largest and most professional FX manager.
Accordingly, the pricing of IDR with other major and non-major currencies are measured on the basis of USD/IDR and USD/other currencies (extreme pegged).
This model of FX Policy could be replicated by all other developing countries by allowing the Federal Reserve Bank of New York to assist the management of the FX stability, the world's largest and most professional FX manager.
Comment:
How long the Federal Reserve Bank of New York will be willing to support this model ?. Geopolitical and Ideology Issues between world's largest Catholic and Christian populated nation (United States) and world's largest Islam populated nation (Indonesia). Middle East -------
Comment:
Comment:
Geopolitical tension on the Jerusalem may put Indonesian Rupiah at risk by sentiment.
Comment:
Comment:
Bank Indonesia FX's Policy of dollarisation could be at high risk during the growing geopolitical tension on the middle east. Indonesian Rupiah could be weakened by USD but at the same time USD will be weakened against JPY, EUR, GBP and CAD and ultimately to deeply weaken the IDR against those currencies. Although AUD and NZD still to be weakened against USD in medium and long term, however it is hedged by the weakening of IDR against USD and at such IDR will be flat against AUD and NZD in medium to long term.
Accordingly, the current FX Policy of dollarisation could be at high risk during the increasing tension of geopolitical on the middle east and may hurt Indonesian economy in medium to long term by pressuring the Bank of Indonesia under stress in medium to long term.
Accordingly, the current FX Policy of dollarisation could be at high risk during the increasing tension of geopolitical on the middle east and may hurt Indonesian economy in medium to long term by pressuring the Bank of Indonesia under stress in medium to long term.