The pressure on rupiah would not yet be over, according to Indonesian Coordinating Minister for Economy Darmin Nasution (Photo: AFP/VNA) Jakarta (VNA) – Indonesian CoordinatingMinister for Economy Darmin Nasution said the pressure on rupiah would not yetbe over although it is relatively stable hovering in a narrow range of14,500-14,600 per US dollar after dropping to the level of 15,000 rupiah per USdollar a few weeks ago.
Nasution said external pressure brought about by normalisationpolicy of the US Federal Reserve (Fed) – the central bank, the trade war threatand commodity price fall would still determine the rupiah condition.
According to Bloomberg, rupiah has depreciated by 10 percentthis year amidst a stronger US dollar after the Fed raised its interest rate.
Infacing the pressure, the one the government could do is to strengthen theeconomic fundamental by cutting current account deficit, Darmin said. Accordingto him, the result would not come in short term to help stabilize rupiahagainst the US dollar.
Thegovernment, therefore, will continue to redress the current account balancesuch as by issuing the 16th economic policy package in a bid to increasecapital account surplus.
Thepolicy package covers revision of the Investment Negative List (DNI), to drawforeign exchange in export earning to be kept in domestic banks and improvementof tax regulation.
Meanwhile,the Jakarta Association of Young Indonesian Business People (Hipmi Jaya) askedthe government to review its decision relaxing the Negative Investment List(DNI) opening 54 business areas for new investment including by foreigninvestment. Under the previous DNI the 54 business areas are closed to foreigninvestment.
HipmiJaya fears that the policy is potential to weaken the position of Indonesianmicro, small and medium enterprises (UMKM) which is the backbone of the country'seconomy contributing 62.58 percent to the country's GDP.-VNA
VNA
