Jusuf Habibie, Indonesia's new vice president, said March 19 that his country is mulling a currency basket for its battered rupiah, according to officials of the Japan Federation of Economic Organizations (Keidanren).
Habibie told Keidanren executives that the Indonesian government wants to to consider anything that could stabilize the rupiah. Under a basket system, a government determines its currency's value as compared to a "basket" of other currencies and allows it to trade only in a narrow range.
This kind of artificial system was used throughout Southeast Asia prior to last summer. While the pegs are widely regarded as helping to foster the Asian Miracle, they also are now seen as playing a role in bringing on the region's current crisis. The tumult began, in fact, when currency traders sensed that the region's governments were not holding sufficient foreign reserves to maintain the pegs.
Habibie and representatives of Indonesian business leaders attended the meeting with Shoichiro Toyoda, chairman of Keidanren, and other Keidanren executives.