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Govt preparing steps to protect rupiah amid Iran-Israel conflict

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Indonesian Finance Minister, Sri Mulyani during the G20 Summit in Bali 2022 (archive) - 

 

VOInews, Jakarta : The government is currently devising strategies for protecting the exchange rate of rupiah from adversary impacts of the Iran-Israel conflict, Finance Minister SriMulyaniIndrawati has said.

The minister observed that the current global situation would surely affect Indonesia's economy, including by disrupting the exchange rate of its national currency.

"We will continue to maintain the stability of the macro economy, both from the monetary and fiscal sides. To adapt to the mounting pressure, we have been in coordination with Bank Indonesia," she noted in her Instagram account @smindrawati, as cited in Jakarta on Sunday.

She added that the government had been striving to ensure that the APBN (state budget) can play the role as an effective and credible shock absorber.

The minister said she acknowledges that the strengthening of the US dollar exchange rate against rupiah might lead to an increase in the value of Indonesian exports.

She, however, noted that such a trend would also adversely affect the country's inflation rate.

On that note, Indrawati emphasized that the government would continue to take anticipatory measures while paying close attention to global dynamics.

"I believe that Indonesia will stand resilient in the midst of this situation," she said.

The state treasurer also expressed optimism about the national economy surviving global uncertainties, like it did during the COVID-19 pandemic era.

"With the support from our strong exports as well as surpluses in the trade balance, I believe that Indonesia's economy will remain stable as expected," she stated.

Earlier, Bank Indonesia affirmed that it would strive to ensure that the exchange rate of rupiah remains stable in the midst of declining US Fed Fund Rate (FFR) and geopolitical tensions escalating in the Middle East.

"We have been striving to maintain the stability of rupiah by resorting to foreign exchange intervention and taking other necessary measures," Bank Indonesia Governor Perry Warjiyo remarked here on Friday (April 19).

In order to sustain Indonesia's economic resilience, he added, Bank Indonesia has been managing the flow of market-friendly foreign portfolios, including by implementing pro-market monetary operations that are integrated with money markets//Antara-VOI

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