Re: Currency melt-down....a repeat of the 97 crisis ?

Western powers esp Oz, punishing RI for being lenient to Abu Bakar
Bashir....


On Wed, 31 Aug 2005 18:37:49 +0800, "Bad boy"
<badboy_sinland@xxxxxxxxx> wrote:

>High oil prices....why is the currency of other countries
>in SE Asia not affected by the high oil prices ...Why
>only Indonesia suffer a loss of over 20% in 3 weeks ?
>
>Oil subsidy is not new in Indonesia....Why the currency
>lost value only now, since 97?
>
>Bad boy
>
>
>"Holy Smoke" <atheist@xxxxxxxxxx> wrote in message
>news:df3dkd$7g2$1@xxxxxxxxxxxxxxxxxxxxxxx
>> The high oil prices is indeed Indonesia woe. Indonesians have been
>> enjoying a fuel subsidy for a long time. Any Indonesian government that
>> try to remove the fuel subsidy will be facing a riot. With this background
>> we can trace the Rupiah's fall.
>>
>> The fuel subsidy, distorts the price mechanism, as oil price rises, there
>> is no corresponding reduction in oil use, because the people are sheltered
>> by the subsidy.
>>
>> Indonesia in the meantime are paying for its oil import at higher and
>> higher prices. The government is unable to recover the cost of the
>> imports because the oil is sold at a 'discount'. This is a drain on the
>> country's reserves. When reserves dwindle, the Government have to attract
>> foreign money to pay for further oil imports. They do this by increasing
>> the interest rates. Investors who wants to earn high interest rates, will
>> exchange US dollars for Rupiah and place the Rupiah in the Indonesian
>> banking system. This has two advantages, Rupiah remains in the country
>> (only name change in the banking accounts, instead of Ahmad, now it is
>> John) and the country has foreign currency to continue to pay for oil
>> imports. (The party continues)
>>
>> As oil prices continue to climb, investors watched the situation unfold.
>> If nothing is done, and when the investors feel that the Indonesian is
>> unable return the foreign money (loss of confidence) that they put into
>> the country, they sell their Rupiah and collect their US$ and leave the
>> country. By the law of supply and demand, the Rupiah will fall if all
>> those with Rupiah accounts wants their money back and will sell down
>> Rupiah for $.
>> This activity is more a cut loss exercise. There is no great white shark
>> out there, don't be a scaremonger.
>>
>>
>>
>>
>> "Bad boy" <badboy_sinland@xxxxxxxxx> wrote in message
>> news:43151964$1@xxxxxxxxxxxxxxxxxxxxxx
>>> The Indonesia Rupiah has lost 21% in value
>>> in the last few weeks. Yesterday, it nose-dived
>>> 8% to 11,800 to US$1.00..... to the same
>>> low level at the height of currency crisis in 97.
>>>
>>> The analysts blamed it on oil prices. This
>>> is nonsense....high oil price affects other Asian
>>> countries and their currencies do not suffer
>>> same fate....at least not yet.
>>>
>>> The great white sharks are back....moving hot
>>> money in and out of Asia since the revaluation of
>>> the China Yuan. In short three weeks, the speculators
>>> made billions and Indonesia lost billions.
>>>
>>> In 97, Singapore had strong control over the
>>> Singapore Dollars. The control measures have
>>> since been relaxed. Now, Singapore has no defence
>>> against a run on the Singapore dollar....we will be
>>> in deep *** soon once the white sharks arrive here.
>>>
>>> Is it time to convert your saving to Sterling or
>>> the green back ?
>>>
>>> Bad boy.
>>>
>>>
>>
>>
>

.

Quantcast