Bank Indonesia says rupiah fall temporary

Jakarta (ANTARA News) - The Indonesian rupiah's fall against the dollar is temporary and due more to the strength of the US currency, a Bank Indonesia official said Friday.

The central bank's public relations director, Budi Mulya, was quoted by AFP as telling reporters that, "as usual, the central bank was not defending the rupiah at a certain level but would monitor currency trading to prevent sharp volatility."

At 2:00 pm (0700 GMT), the rupiah was at 9,090/9,100 rupiah to the dollar, down from 8,875/8,880 rupiah late Thursday.

Vice President Jusuf Kalla recently had expressed his hope that gains in the rupiah would be short-term.

The rupiah has recently been one of Asia's fastest rising currencies as upbeat foreign investors buy both stocks and bonds in Southeast Asia's largest economy.

Indonesia's central bank Thursday cut its benchmark interest rate by 25 basis points to 8.50 percent. Since May last year, the central bank has cut the rate by a cumulative 425 basis points.

Lower interest rates normally make a currency less attractive to investors since their return falls.