Indonesia’s deputy central bank governor Budi Mulya said on Friday he expected the rupiah, Asia’s best performing currency so far this year, to strengthen further.
Some analysts say a further appreciation in the rupiah could help reduce inflationary pressure from imported foods and may offer more leeway for the central bank to cut its benchmark overnight rate again.
“The tendency is for the rupiah to strengthen further,” Mulya told a seminar.
The rupiah, which has risen 11 percent so far this year, was trading down 0.4 percent at 9,910 per dollar on Friday morning.
Mulya said that annual growth would be slower in the second quarter than in the first.
“For the second quarter, economic growth would not be higher than in the first quarter.”
He said that the inflation rate next year would be at 5 percent plus or minus 1 percent, while he estimated bank lending would grow 11-12 percent in 2009.