Afang was new to the business and it was her first time getting up close to the financial market, so she didn't quite understand what Chen Dong was saying.
Despite the Indonesian Rupiah's exchange rate against the US dollar rising, Chen Dong concluded that the Rupiah would depreciate.
She asked curiously, "The financial channel hosts and analysts all say that the Indonesian rupiah will appreciate. Why are you so sure that the Indonesian rupiah will depreciate?"
Chen Dong sighed and put down the materials in his hand. "Think about it, what is their basis for believing that the Indonesian rupiah will appreciate in value?"
Afang thought for a moment, her beautiful eyes widening slightly as she frowned. "The Southeast Asian economic crisis has lasted for quite some time. After experiencing currency devaluation and the gold rush, the credibility of governments in people's minds has been completely tarnished."
"The current push for currency appreciation is not only driven by the needs of the people, but also by the government's need to regain public trust and credibility."
"Furthermore, the long-term depreciation of the Indonesian rupiah is not conducive to imports."
"Indonesia is an island nation, and it can't produce almost all of its daily necessities and raw materials on its own. It has to import them from overseas."
"What's another reason?" Chen Dong asked.
After thinking for a while, Afang shook her head.
Chen Dong explained, “Prices are rising, but Indonesian consumers’ spending power is not increasing. In order to prevent their money from becoming worthless, people have no choice but to keep investing in fixed assets, such as real estate and gold.”
"However... recent unfavorable news about gold prices from the Swiss National Bank has shattered people's last hope."
"The decline in gold prices indicates that the large amounts of gold they previously invested in have lost value, thus turning both the housing market and gold into bubbles."
Afang is a very smart person. No matter what it is, she can usually understand it as soon as Chen Dong points it out.
She continued Chen Dong's words, adding, "Due to its unique religious system, Indonesia's social atmosphere tends to be conservative, which manifests in its economy as an inward-looking economy."
Wangcai, who was listening nearby, vaguely remembered that Chen Dong had once told him about the performance of an inward-looking economy.
He interjected, saying, "An inward-looking economy tends to be conservative; currency devaluation leads to reduced imports, which in turn reduces domestic employment."
"This situation is the exact opposite of Malaysia's export-oriented economy."
"However, although these two countries share the same origin, they are very different in terms of political system and social environment."
Malaysia has an open economy, and although there are many conservative religious figures in the country, the overall social environment is trending towards secularization.
But Indonesia is different; it is a completely religious country.
Religions tend to be conservative, and in order to consolidate their position, they have to make concessions to religious interests in various political and economic policies.
In recent years, Indonesia's economic development has stagnated and employment has decreased, leaving the country in dire straits.
When the sounds of prayer in mosques fail to distract people from their anxieties, large-scale social unrest ensues.
It was precisely this quantitative change that led to a qualitative leap that forced the Indonesian government to seek external assistance in order to weather the Southeast Asian financial crisis.
As they were chatting, Annie came in from outside, looking somewhat hesitant. "Boss, there's someone who claims to be from an Asian investment bank, saying he wants to talk to you about a collaboration."
"Do you have an appointment?" Chen Dong asked.
No appointment.
Anne added, "He said he wanted to talk to you about the last deal."
Chen Dong thought for a moment, and of all the deals he had discussed, the only one related to Asian investment banks and capital was the one he made to Feng and that Indonesian, Bak, that day.
"Let him in."
Sure enough, a familiar face soon appeared in front of Chen Dong.
“Hello, Buck,” Chen Dong said.
Bak greeted him in Indonesian, then got straight to the point: "My big client has agreed to the price you proposed."
Hearing this, Chen Dong was not surprised at all.
After two days of speculation about the International Monetary Fund's potential cooperation with the Indonesian government, international speculative capital generally has a bullish outlook on the Indonesian rupiah.
Soros also saw the potential of the Indonesian rupiah, which is why he was in such a hurry.
Even knowing that the exchange rate for this $2 billion deal was higher than the market rate, he still gritted his teeth and decided to buy it.
Chen Dong gave Wangcai a look, and Wangcai, being sensible, said, "You can discuss the specific details of this $2 billion deal with me."
"Please come to my office."
Before leaving, Buck thanked Chen Dong, saying, "Thank you for your help, Boss Chen."
Afang narrowed her eyes. "You really intend to use this $2 billion to swindle Soros?"
Chen Dong smiled and shook his head, looking innocent. "What do you mean I cheated him? It's a free market, free trade, and it's all consensual."
“He was willing to pay a higher price than the market exchange rate to buy the Indonesian Rupiah from me; it was his own decision.”
Seeing Chen Dong's confidence, Afang couldn't help but remind him, "Don't be too confident and you'll be outmaneuvered by Soros."
"Although Soros's stock market operations are often unethical, he has a wealth of practical experience."
After hearing what Afang said, Chen Dong turned his head away impatiently. To be honest, Chen Dong knew more about Soros's deeds, his past and future than Afang did.
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