Asian currencies ended lower against the US dollar yesterday as Indonesia's revised budget met with muted response from foreign exchange markets and failed to give a much-needed stimulus to the ailing rupiah. The rupiah hardly emerged from the abyss, ending Asian trading hours at about 13,000 against the dollar from Thursday's close of 12,000.
Bank Indonesia, the central bank, intervened to shore up its currency, which hovered earlier at 14,500 against the dollar before the budget was unveiled by the Finance Minister, Mr Mar'ie Muhammad, in a televised speech to parliament, dealers said. Soaring debts in Indonesia were still the major concern of the markets and until a mechanism was in place to address the debt crisis, the rupiah would remain on dangerous ground, analysts said.
Indonesia slashed fuel subsidies and affirmed IMF-backed targets of zero growth and 20 per cent inflation in the revised budget for the year to March 1999 which followed a new reform deal last week with the International Monetary Fund (IMF). The Indonesian finance minister put the total budget for the fiscal year to March 1999 at 147.22 trillion rupiah, 46 per cent higher than the previous year, and assumed an average exchange rate for the year of 5,000 rupiah per dollar.
