Goldman Sachs note that "in early........>

DOLLAR-IDR: Goldman Sachs note that "in early June, we argued that, after rapid

Rupiah appreciation versus the Dollar, the pace of IDR outperformance could

slow. Since then, the IDR has depreciated versus the Dollar while other Asian

currencies have been more resilient. Against this backdrop of underperformance,

the announcement that Bank Indonesia would purchase large amounts of zero

interest bonds with the stated intention of helping to shoulder the country's

fiscal burden was unexpected. Much will depend on how inflation evolves in the

months ahead and how this tool will be used. If the BI can convince markets that

it will sterilize its liquidity injection appropriately, and that this unusual

central bank purchase is a one-off, then we think any IDR sell-off should be

limited. If, however, investors see potential for this tool to be used in more

normal times, the IDR could begin to reflect risks from a loss of confidence in

policy, and an increase in inflation expectations. An adverse market reaction

could see USD/IDR moving towards our 3-month forecast of IDR14800 in more a more

front-loaded fashion."