EURIDR PERFORMANCE & OUTLOOK BASED ON BANK INDONESIA'S FX POLICY
The measure of EURIDR is the measure of USDIDR and EURUSD. IDR is dollarized based exchange rate. EUR will be appreciated by USD largerly in long-term and will result the appreciation of EUR by IDR, however should the USD to be depreciated by IDR then the rate to be hedged (EURIDR hedged by USDIDR), BUT THE RISK is, should IDR depreciated by USD and EUR appreciated by USD then IDR will be collapsed.
The Bank Indonesia's FX Policy is one of the appropriate model due to the limitation on the capability of the Bank of Indonesia for managing the FX in the market with multiple currencies. However, the risk associated to the model could be higher and lower dependent on the USD performance with other currencies and the hedging/non-hedging by the performance on the rate of USDIDR. Nonetheless, it is the only available option for FX price stability at this time until Bank Indonesia advanced her FX management standard practice.
The Bank Indonesia's FX Policy is one of the appropriate model due to the limitation on the capability of the Bank of Indonesia for managing the FX in the market with multiple currencies. However, the risk associated to the model could be higher and lower dependent on the USD performance with other currencies and the hedging/non-hedging by the performance on the rate of USDIDR. Nonetheless, it is the only available option for FX price stability at this time until Bank Indonesia advanced her FX management standard practice.
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