Posted on 11 Mar 2015
Indonesia will impose a series of regulations, including temporary anti-dumping import duties, to help narrow the current account deficit and prop up a weakening rupiah in Southeast Asia’s largest economy, the finance minister said today (March 10).
The rupiah slipped as low as 13,090 to the US dollar today, the lowest since the Asian financial crisis of 1997-1998. After Malaysia’s ringgit, the Indonesian currency is the worst performing emerging Asian currency so far this year, with a 5.2 per cent loss against the greenback, Thomson Reuters data showed.
“The condition currently is stable and maintained, but despite that, we in the government always watch the movement of the rupiah, and of course we have to make policies to strengthen the currency,” Finance Minister Bambang Brodjonegoro told reporters, adding that the regulations will address the problem of Indonesia’s current account deficit.
Under the new regulations, the Finance Ministry will impose a temporary tax on imported goods suspected of being sold below fair market value. That allows the ministry to take action against anti-dumping immediately, instead of waiting for the Trade Ministry to complete its investigations.
Officials declined to say which imported goods could be targeted.
The Trade Ministry is currently investigating possible dumping of cold rolled stainless steel imports from China, Thailand, South Korea, Taiwan and Singapore. It was also investigating dumping of polyethylene products from China, India and Thailand.
The Finance Ministry will also offer tax breaks to companies that export at least 30 per cent of their products in a bid to develop the country’s manufacturing industry.
Indonesia’s current account deficit narrowed to 2.95 per cent of gross domestic product last year from 3.18 per cent in the previous year. At times, the size of Indonesia’s current account deficit has reached 4 per cent of GDP, which has worried investors and put pressure on the rupiah. The central bank said a current account deficit of 3 per cent of GDP this year would be acceptable.
