Revaluation of yuan receives mixed reactions in Indonesia

China's decision to revalue the yuan and make it stronger against the US dollar met with mixed reactions in Jakarta, with officials splitting on how the move would effect the Indonesian economy.

Some were upbeat about the move, saying it would give a definite advantage to Indonesia's economy in terms of trade competitiveness, while others doubted a higher yuan would have any significant positive impact on trade, reported The Jakarta Post onSaturday.

Vice President Jusuf Kalla was one of the biggest optimists, saying that a stronger yuan would help boost Indonesia's economic growth, as exports to China would increase because Indonesian products would be more competitive in terms of price.

"Our exports to China will increase while our imports from there will decline because their products will get more expensive,while the price of our products will remain low," he was quoted assaying.

Coordinating Minister for the Economy Aburizal Bakrie, however,failed to share Kalla's positive outlook, saying the revaluation'smagnitude was too small to bring any significant competitive edge to Indonesian exports.

"A revaluation of only 2 percent will not make Chinese productsmore expensive (compared to ours)," Aburizal said.

Minister of Finance Jusuf Anwar meanwhile said the government would keep monitoring the impact of the yuan's revaluation over time, as the measure would theoretically affect Indonesia in many ways that might not be immediately visible.

"We should watch how the yuan revaluation will affect our majortrading partners, the United States and Japan. Because what happens to them will then affect us," he said.

Source: Xinhua