BI Rate Up, Help Rupiah Up prestige?

Indobusiness - Rising interest rates by Bank Indonesia (BI rate) by 50 basis points is expected to raise the prestige of the exchange rate continues to drop and the latter, in addition to the anticipated rate of inflation due to rising prices of subsidized fuel.
Senior Economist at Standard Chartered Bank, said the rise Ichsan BI rate as well hinted that Bank Indonesia no longer wants to be the sole supplier of U.S. dollar liquidity in the domestic market.
Currently, the foreign exchange reserves in the central bank has less than 100 billion dollars, making it necessary steps to re-raise.
"The rise in the BI rate will push up interest rates on deposits. Exporters who still holds the U.S. dollar would be interested dollarnya convert to dollars to be stored in domestic banks. This will help strengthen the exchange rate and boost foreign exchange reserves," he said on Thursday (11 / 7/2013).
According Ichsan, to date no national banking funds of 7.7 billion U.S. dollars parked overseas. The fund is owned by the exporters who have not been converted into dollars.
"The amount of U.S. dollars in the currency market indicates there is actually no problem in terms of the currency supply.'s Just dollars held in banks and do not enter in the foreign exchange market," he explained.
Associated with interest rate loans, Fauzi explained that it probably does not go up because there is no competition in lending. He argued, prospective borrowers can find banks that offer loans with low interest.
BI choose to raise the BI rate (BI Rate) in the month of July 2013 by 50 bps to 6.5 per cent. BI Rate to anticipate the inflation rate in July 2013 due to rising prices of subsidized fuel.
BI Governor Agus Martowardojo revealed, attitudes BI BI rate increase this month because they want to maintain the stability of the financial system and want to restore the central bank targets inflation in accordance with the original.
BI has previously been predicted in July 2013 inflation could reach 2 per cent (mom). However, for August and September 2013 inflation will decline. "In this month, we raised the BI rate by 50 bps to 6.5 percent," Agus said during a press conference at the Bank Building in Jakarta, Thursday (07/11/2013).
In addition to raising the BI rate, the central bank also raised interest rates on Bank Indonesia Deposit Facility (FASBI) by 50 bps to 4.75 percent.
On the other hand, the central bank keeps interest rates on fixed loans, which at 6.75 percent. Fixed rate loans is because they want to keep credit growth in the community. "To anticipate the increase in BI Rate and Fasbi this, we will keep the policy mix," he added.