Indonesian Rupiah

Being Indonesian, it'll be incomplete not to do some analysis on my home country's currency with regards to the changing central bank policies around the world.

Here's a starter:

• Indonesian Rupiah will tend to benefit from the strength of the USD. Sounds weird? Read on.
  
• With its high interest rate (9.25% currently), it yields higher than other major currencies, not even the NZD and the AUD can beat that.
  

Why would the Indonesian Rupiah benefit from the strength of the USD ?

• From the currency movement for the past year, rupiah has been trading steadily against the USD. The USD/IDR pair has been trading around 9100-9300 much of the year. It's been trading within the range of 2% and one would say that the Rupiah has been pretty much 'pegged' to the USD much of the year due to relatively stable political situation in the country. This is also the directive for the Indonesian Central Bank to keep USD/IDR rate stable as the USA is its 2nd biggest trading partner; with first being the Japanese.
  
• Current Indonesian government has been doing all the right things, in my opinion, to avert further decline in the currency against other currencies. While those may not be what the Indonesian people would like to see done, but those are the correct policies towards better economies in Indonesia.
• One action that directly impacts the currency is the partial removal of subsidies on fuel. Fuel subsidies have been taxing on the government budgets and such removal has helped to cut the budget deficit and defend the currency. Budget deficit causes one country to 'borrow' more money overseas while depressing its own. Such move (cutting subsidy) has not been popular with the Indonesian people, but a move in the right direction towards a better economy, in my opinion.
  
• Indonesia is a commodity-rich country, while it does not benefit directly from the rising commodity prices, it has helped to moderate inflation (which otherwise would run even higher) and curb budget deficits which would otherwise runs really high. Compare it with the Philippines (which imports all of its oil and rice consumptions), Indonesia is in better shape in a rising-commodity-prices environment.

Conclusion:
Indonesian Rupiah is a good alternative to USD at this moment with high interest rate of 9.25% currently.

Note: I would suggest to buy this currency only if you're residing in Indonesia or very much in touch with the political situation in Indonesia as political situation within the country is one major factor that affects the currency.