As Henry Harianto rode his ubiquitous scooter up to one of the many makeshift gas stations in Bali to fill it up with petrol from a re-purposed Absolut Vodka bottle, he grumbled about how the price of gasoline has been steadily increasing over the past year and that it’s been eating into his living expenses. Harianto is not alone. In the archipelago of 168 million people, the fall in the Indonesian rupiah (the local currency) has been progressively making oil — the feed stock gasoline and other petroleum products much more expensive. With the rupiah having taken a battering over the past year. in late October, Indonesia, in an effort to stem the tide of foreign exchange outflows asked suppliers of diesel and crude to stop charging in dollars and offered them a variety of other options such as the rupiah, Chinese yuan, euro, Japanese yen or the Saudi riyal. And while Jakarta is hopeful that as many suppliers as possible will opt for the rupiah to relieve downward pressure on its embattled currency, such hopes are wishful at best.
Read More...