Posts Tagged ‘When The Market Began To Doubt’
When The Market Began To Doubt
Bank Indonesia (BI) believes the turmoil that hit the stock market and the exchange rate deterioration, which occurred last few days of panic induced sulutan based in Europe, will not last long. Because, in terms of fundamentals, real economic conditions are not so bad.
“We think this is not too worried because the fundamentals do not. The relationship between the rupiah and the dollar also strengthened its direction (forward). So, (the turmoil) is temporary,” said Nasution Acting Governor of Bank Indonesia in Jakarta, Friday (7 / 5 / 2010).
BI also do not see this volatility as the estuary of the emergence of new financial crises. “No, far from it. Fundamental than that. The United States and Europe either, except Greece and several countries. This is not a phenomenon which shows that all the worse,” he asserted.
Darmin explained, the wave of unrest that affected the drop in stock prices in almost all corners of the world, including the strengthening of the dollar against all currencies, which stems from European conditions related to the debt crisis of the Greek case. “All through this world, Indonesia is not the worst (have impact), although also not the best,” he said.
In situations of uncertainty and panic, the owners of capital dollars to run chase. That make this country a currency Uwak Sam is suddenly powerful against almost all currencies in the world. Nasution said, when viewing the development of the Greek settlement of the case, should the market had calmed down. “It should not be long, so obviously the solution to the Greek,” he said.
However, because this problem is more related to market sentiment or psychology will ease the panic difficult to ascertain. “We do not know to Greece, whether the European Union Central Bank and the IMF deal how far that would convince the market. Even if it is decided the solution, but if the market does not believe it, ya will not work as well,” said Nasution.
Especially this time not only ignited the attention of the Greek market, but the market began to doubt the condition of other countries in Europe, including Portugal and Spain. “The Spanish CDS is now worse than Indonesia, but so far both Spain including those assessed by the market economy,” he said.