Rupiah fate may hang on Indonesian inflation

The rupiah was Asia's worst-performing currency in 2007 and may struggle again this year if a global slowdown cuts demand for Indonesia's exports, but a healthy economy and an end to official rate cuts may help. Analysts say much may hinge on what the government decides to do about inflationary risks, with some betting that it will allow the currency to rise to combat imported inflation. The rupiah fell 4.3% against the dollar last year as global credit market turmoil dented investors' appetite for risky emerging market assets and cuts in Indonesian interest rates ate into its yield advantage over Asian rivals. (http://www.antara.co.id/en/arc/2008/1/3/rupiah-fate-may-hang-on-indonesian-inflation/