We're anticipating political turbulence until August. On May 8 the rate was 10,816 rupiah to the dollar. In the next two months there will be a flurry of political activity that is likely to further roil the currency. Beleaguered President Abdurrahman Wahid is attempting to defuse opposition to him in parliament. If he fails he could be impeached in June or July.
Most analysts rule out a quiet exit.
The extra revenue must be raised by collecting more taxes and slashing state subsidies on oil and electricity. Cutting subsidies will drive up inflation. Both measures are politically sensitive and neither is guaranteed to fix the problem. It used to be that Indonesia's plunging currency made less difference to the macro-economic situation, explains a senior foreign economist in Jakarta. Receipts from exports increased and so did revenue.