HELEN BROWN, REPORTER: Indonesia is in the middle of a reality check. It's posting growth of more than 6 per cent and foreign direct investment is at record levels.
But its currency the rupiah is under pressure, becoming one of the weakest in the region. And the current account has swung into the red, posting a $24 billion deficit last year as the value of imports swamped that of its exports. It was the country's first deficit since 1997.
FAUZI ISCHAN, SENIOR ECONOMIST, STANDARD CHARTERED BANK: That alone has put a lot of pressure on the rupiah, so the underlying reason why the rupiah has been weakening over the last one year, it's fundamental, ie. the deterioration of the current account.
HELEN BROWN: As the nation grapples with its new fiscal position, attention is being focused here at the petrol pump. Indonesia's ferocious appetite for oil, and the bill that comes with it, is adding to the current at deficit. The energy is needed for the growing economy but more of it is also being used by the public that are soaking up the subsidised fuel provided by the Government.
CHATIB BASRI, CHIEF, INDONESIAN INVESTMENT BOARD: One of the sources of the problem of this current account was driven by the import oil. That concerns me a lot because I think this is something we could avoid.
HELEN BROWN: The increasing oil bill is paid for in US dollars. That accounts run by Indonesia's state-owned oil company Pertamina.
KAREN AGUSTIAWAN, PRESIDENT AND CEO, PERTAMINA: I think the money it costs right now is about around $70 to $80 million per day.
HELEN BROWN: Per day?
KAREN AGUSTIAWAN: Per day. That's the cost. It's both crude oil and products.
HELEN BROWN: And that's in US dollars, yes?
KAREN AGUSTIAWAN: US dollars.
HELEN BROWN: The central bank's overarching role is to keep the rupiah stable. For the past year it's been dipping into its large chest of the international reserves to put US dollars into the market. In the past two months alone, Bank Indonesia has channelled $US7.6 billion.
DIFI JOHANSEN, SPOKESMAN, BANK INDONESIA: It has been working gradually. We have seen the confidence in the market.
HELEN BROWN: What happens next for the rupiah depends a lot on the global economic outlook. If conditions improve as most expect and commodity prices rise, the increased income should reduce some of the pressure.
BEN BINGHAM, COUNTRY REPRESENTATIVE, IMF: I think what we saw last year was that the trend in the current account deficit, OK, this downward trend, was weighing on sentiment. I think the fact it is flattening out, OK, now will take run risk factor away from the currency.
HELEN BROWN: Indonesia has a painful memory from the late 1990s when the value of its currency crashed to more than 14,000 against the US dollar. Fifteen years later and its banking institutions are considered strong and stable, and the rupiah is hovering around the 9,600 mark.
Analysts say there are two numbers that Bank Indonesia is very mindful of and that's the currency hitting 10,000 rupiah against the US dollar, and its foreign reserves dropping below $US100 billion. It's said those two numbers are the two that the bank is very mindful of as it uses what measures it can to stabilise the currency.
FAUZI ISCHAN: Yes, I mean, of course if the dollar rupiah bridges the 10,000 level that's the psychological level. Beyond 10,000, then the panic will kick in.
HELEN BROWN: Soon monetary policy could be in the hands of this man, the country's respected Finance Minister.
With the policy on the rupiah and defending the rupiah, would you follow the same policy?
AGUS MARTOWARDOJO, INDONESIAN FINANCE MINISTER: I have no comment because I'm now still a minister of finance and I leave that comment to the governor of Indonesia.
FAUZI ISCHAN: I think one challenge, the biggest challenge, is the fact that the BI board of governors, they report to Parliament. They get appointed by parliament and therefore they report to parliament and they're accountable to parliament and in that sense, their flexibility over monetary policy is limited.
HELEN BROWN: The central bank's other option is to raise the official interest rate, attracting more investment in rupiah. But it has kept the rate steady for the past 13 months, and increasing it would be a sensitive move, particularly in the year before a presidential election.