medcom.id, Jakarta: China is expected to devalua its yuan currency. If it happens, rupiah value will not strengthen to return in the level of Rp12,000-ish per USD.
The member of Deposit Insurance Agency (LPS) Commissioners Board, Destry Damayanti said the yuan devaluation will make other currencies in Asian region to feel pressure, including Indonesia. This pressure forced rupiah currency to weaken in order to compete with other countries.
"Other nations will be depreciated. If we become stronger in a short time, our export will become more expensive and not competitive. The strengthening of rupiah, overshadowed by yuan devaluation will pressure the export," said Destry in Shangri-La Hotel, Jakarta, Monday (3/14/2016).
On the other hand, Destry continued, the current account deficit condition expected to widen this year will still shadows the flow of rupiah. Currently, the position is still at around 2.6 percent on the GDP, however it may increase beyond three percent by the end of the year.
According to the former economist of Mandiri Bank, the deficit widening is due to large amount of Indonesian import, where 71 percent was on raw materials and 17 percent on capital goods. However, the import is not balanced by the strengthening of export obstructed by the Chinese economic slowdown, as Indonesia's trading partner.
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