Rupiah Breaks Rp 15,000 per US Dollar, Minister of Finance Explains Indonesia’s Economic Conditions All

KOMPAS.com – The exchange rate of the rupiah against the United States dollar in the last few days has been observed to have transgressed to Rp. 15,000.

Based on data in Bank Indonesiathe rupiah exchange rate against the US dollar was at 15,030.78 on Monday (4/7/2022), weakened to 15,034.80 for Tuesday (5/7/2022), and slightly weakened to 15,064.95 on Wednesday (6 /7/2022).

Regarding these conditions, Minister of Finance Sri Mulyani Indrawati gave an explanation about the condition of the Indonesian economy.

He said that several economic indicators, especially from the financial side, namely the rupiah exchange rate, interest rates, and inflation were still in dynamic condition.

However, Indonesia’s condition is still considered quite good, at least as reflected in the current account balance.

“Several economic indicators, in the current world situation, will still be very dynamic. However, in terms of Indonesia’s balance of payments, the current transaction is quite good,” Sri Mulyani said at the DPR RI Building, quoted from Kompas.com (5/7/2022).

Also read: Anticipating the Global Economic Crisis, What Should the Government Do?

It was recorded that the current account balance in the first quarter of 2022 experienced a surplus, continuing the achievement at the end of 2021 which was also a surplus.

By the end of May 2022, foreign exchange reserves also reached 135.6 billion, equivalent to 6 months of imports and government foreign debt.

However, Sri Mulyani said that the US Central Bank’s policy of aggressively raising its benchmark interest rate made investors more interested in investing their funds there.

So, a lot of funds flow out (capital outflow) from countries emerging marketincluding Indonesia.

“In this case capital flow (outflow) maybe that happened because with interest rate rises in the US, then investors are looking for safe assets or interest rate-higher,” he explained.

Regarding the situation, Sri Mulyani admitted that the government would continue to look at developments and economic indicators in formulating policies.

Also read: Rupiah Breaks Rp 15,000 per US Dollar, What Impact on the Indonesian Economy?

He ensured that the government would continue to maintain stability through spending, revenue and financing.

“For example, helping in terms of policies regarding trade, investment, export-import, distribution. Because that’s the problem that occurs from current inflation, but if there are problems with the demand then we will manage it together,” explained Sri Mulyani.

Previously, the rupiah exchange rate weakened to touch 16,011.90 on March 27, 2020 and 16,376.68 on April 3 in the same year.

This happened in the early days of Indonesia confirming the findings of cases of Covid-19 infection.

As for Thursday (7/7/2022), based on data Bloombergthe rupiah exchange rate was at the level of 14,999, slightly stronger than the level at the market opening today, which was at 15,022.50.

Also read: Rupiah Breaks Rp. 16,000, Government Value Investors Slow to Handle Corona

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