Jakarta – Rupiah on Monday reached its highest level against the dollar since August 2000, sparking concerns that the upturn could be overdone and harm the country's exports.

As of early afternoon the rupiah was at 8,145/8,155 to the dollar. The absence of central ank intervention to halt the appreciation indicates that Bank Indonesia is comfortable with the current level, said G.K. Goh Stockbrokers economist Song Seng Wun.

Bank Indonesia governor Burhanuddin Abdullah has said a strong currency is important for the country and urged exporters to boost efficiency to minimise the impact on export revenues. "I guess the market wants to test the 8,000 level before it starts to take profit," Song told financial newswire AFX-Asia, adding that the market is also waiting for Bank Indonesia's reaction.

Fundamentally the rupiah should "at best" reach a level of around 8,200-8,300, he said. "Beyond 8,200/8,300, it is an excessive appreciation within a short period of time," Song said, adding that the gain has not been supported by a change in economic fundamentals.

A stronger rupiah is a useful weapon in efforts to bring down inflation as well as the debt burden but it will not help exports, he said. He believed the rupiah was partly supported by a continuing fund inflow as well as ongoing assets sales.

These include the divestment of government stakes in banks to foreign investors and other smaller assets sale such as the divestment of the Astra International stake in Toyota Astra Motor to Toyota Corp.