Mon Dec 7, 2009 9:32am IST
http://in.reuters.com/article/globalCoverage3/idINIndia-44518420091207

JAKARTA (Reuters) - Indonesia's deputy central bank governor Budi Mulya said on Monday that there was still excess demand for the rupiah in the foreign exchange market.

The rupiah , Asia's best performing currency, has appreciated about 16 percent this year, and Bank Indonesia, the central bank, is concerned about hot money inflows.

"The current trend in the emerging markets is for their local currencies to appreciate due to the excess (funds) and depreciating dollar on uncertainties about a global economic recovery," Mulya told reporters.

"What we have to realise is our economic character is different from other forex markets. There is still excess demand in the domestic foreign exchange market."

When asked whether the time was right to consider capital controls, Mulya said "foreign investments require sustained confidence in the financial market".

Last month, senior deputy central bank governor Darmin Nasution said Bank Indonesia was studying the possibility of curbing foreign ownership of its short-term debt, SBIs.