REPUBLIKA.CO.ID, JAKARTA -- Bank Indonesia (BI) will remain alert for global economic developments despite the rupiah's significant appreciation against the U.S. dollar during the past week.

"Let's see, may the recovery continue. Yet, we must also continue to look at external factors in the United States and other countries," Deputy Senior Governor of Bank Indonesia, Mirza Adityasawara said on Friday.

Based on the JISDOR BI rate, the rupiah traded at Rp13,521 per U.S. dollar on Friday against Rp13,809 per dollar the day before. Four days ago, the Indonesian currency was still hovering at Rp14,604 per dollar.

"Three days ago, the rupiah had strengthened significantly because many had cut their losses short. Some have cast doubts that the rupiah would hit a level of Rp13,800 per dollar. I once stated that the assumed exchange rate set during the state budget is Rp13,800. However, the assumption is based on weak macro-economic conditions," he stated.

He added that the rupiah's exchange rate is still competitive and will spur the export of manufactured goods and keep the inflation rate in check because the increase in prices of imported goods will be held by the rupiah's appreciation.

"Based on data up to September, our inflation rate has been moving closer to the target. It will stay in the range of 4.1 to 4.3 percent at the end of this year so it is very good," he stated.

The export and import data also showed a monthly surplus, suggesting that the current account deficit will be sound, slightly more than 2 percent at the end of this year, he said.

The rupiah's sharp appreciation during the past few days should not be worrying, but must be maintained, he said.

By Friday, the rupiah had strengthened by up to 4.4 percent, higher than the Malaysian ringgit at 3.4 percent, Korean won at 1.2 percent, Taiwanese dollar at 1.2 percent, and Thailand bath at 0.4 percent, he said.

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