Indonesian Central Bank's JISDOR & SISMONTAVAR at High Risk
Indonesian constitution on FX policy renewed to "dollarisation" by May 2013 to replace the previous policy established in 1995. Renewing the FX policy with JISDOR and Sismontavar in 2013 by "dollarisation" is an advancing step to enable the Bank Indonesia to limit their management on USDIDR exchange rate and the exchange rate of the IDR with other currencies become depending on the exchange rate of USD with other currencies managed by the Fed Res New York. At such, the exchange rate of EURIDR is the measure of exchange rate of USDIDR + EURUSD. Similar equation for other currencies.
The acceleration of the US economy will be supportive to up-lift the US allies' economies and to strengthen US allies' currencies to the USD, or EUR, GBP, JPY, CHF, CAD, AUD and NZD will be stronger than USD in long term (read the analysis on EUR, JPY, CHF, GBP, CAD, AUD, NZD) which will pressure IDR in the market by the JISDOR and Sismontavar. However, the pressure could be hedged by the performance of USDIDR if IDR to be strengthened against USD, but the risk is caused by the current geopolitical changes by the current US policy on the Middle East.
The US policy on the middle east, Jerusalem, in particular, is shaking the world. The policy is prohibiting capital inflow into the middle eastern and the middle eastern's allies, such as Indonesia. The $ 6 trillion capital outflow from the US to the middle eastern during the last 10 years is considered to be "worthless" by not restoring the stability in the middle eastern but more likely to empower the radicalism and global terrorism.
Global sentiment will hammer the investment and capital inflow into the middle eastern and the middle eastern's allies, such as Indonesia. The growing security instability in the middle eastern and the middle eastern's allies, such as Indonesia, will hammer the tourism arrivals to hammer the tourism industry. This will result to hammer the economy as well as to drive capital out-flowing from the middle eastern and middle eastern's allies, Indonesia, in particular.
The pressured capital in-flowing into Indonesia as well as the pressured foreign investment and the pressured tourism arrivals will hammer Indonesian economy in long term and to weaken IDR against USD in medium to long term and to double the weakening of IDR against major currencies in medium to long terms. Indonesia may need extra-ordinary FX policy tool as well as extra-ordinary monetary policy in responding to the current global shaking.
The acceleration of the US economy will be supportive to up-lift the US allies' economies and to strengthen US allies' currencies to the USD, or EUR, GBP, JPY, CHF, CAD, AUD and NZD will be stronger than USD in long term (read the analysis on EUR, JPY, CHF, GBP, CAD, AUD, NZD) which will pressure IDR in the market by the JISDOR and Sismontavar. However, the pressure could be hedged by the performance of USDIDR if IDR to be strengthened against USD, but the risk is caused by the current geopolitical changes by the current US policy on the Middle East.
The US policy on the middle east, Jerusalem, in particular, is shaking the world. The policy is prohibiting capital inflow into the middle eastern and the middle eastern's allies, such as Indonesia. The $ 6 trillion capital outflow from the US to the middle eastern during the last 10 years is considered to be "worthless" by not restoring the stability in the middle eastern but more likely to empower the radicalism and global terrorism.
Global sentiment will hammer the investment and capital inflow into the middle eastern and the middle eastern's allies, such as Indonesia. The growing security instability in the middle eastern and the middle eastern's allies, such as Indonesia, will hammer the tourism arrivals to hammer the tourism industry. This will result to hammer the economy as well as to drive capital out-flowing from the middle eastern and middle eastern's allies, Indonesia, in particular.
The pressured capital in-flowing into Indonesia as well as the pressured foreign investment and the pressured tourism arrivals will hammer Indonesian economy in long term and to weaken IDR against USD in medium to long term and to double the weakening of IDR against major currencies in medium to long terms. Indonesia may need extra-ordinary FX policy tool as well as extra-ordinary monetary policy in responding to the current global shaking.