Louise Williams, Jakarta – Indonesia's rupiah hit a record low yesterday, despite the massive International Monetary Fund (IMF) rescue package, following the Soeharto Government's announcement that it would stop attempting to prop up the currency by intervening in the money market.
The rupiah fell to 3,977 to the US dollar yesterday afternoon, wiping off all the gains made after the IMF announced the $US38 billion ($56.1 billion) package for Indonesia last month. In August the rupiah was trading around 2,400 to the US dollar before trading bands were removed in the face of the Thai economic crisis. The currency dropped to 3,800 before the IMF was called in.
At the same time a member of the Human Rights Commission said large scale lay-offs over the next few months would mean all Indonesians still holding a job would be supporting seven members of their extended family.
The Finance Minister, Mr Mar'ie Muhammad, said intervention by Japan, Singapore and Indonesia which has been used to prop up the rupiah would be suspended. The turmoil surrounding South Korea's economic woes meant intervention was no longer effective, he said.