Jakarta (Antaranews Jatim) - Coordinating Minister for Economy Darmin Nasution dismissed suggestion describing Indonesian economy as nearing crisis, saying falling value of rupiah does not necessarily signal emergency.
"Describing our present situation as if we are about to plunge into crisis is out of proportion," Darmin Nasution said here on Thursday.
Shrinking rupiah value against the U.S. dollar would not drive us to the brink of crisis, he added speaking after the ceremony installing a new Governor of Bank Indonesia Perry Warjiyo.
He said economic crisis came when the domestic real sector is jolted with impact on the monetary sector.
He said he agreed that the present condition of the economy need serious addressing by the government.
"Not that bad, but indeed, the situation needs serious addressing and monitoring. That, I agree," he said.
The national currency has from early this year continued to weaken and now it almost hit the level of 14,200 per U.S. dollar.
Based on data at the Central Bank, rupiah had lost much of its value weakening 4.53 percent until May 21, 2018 (year to date) hitting the lowest level since 2015.
Bank Indonesia has raised its benchmark interest 7-Day Reverse Repo Rate by 25 basis points to 4.5 percent hoping to prop up the currency.
However, the increase decided in a regular monthly meeting of the Central Bank's Board of Governors on May 16-17, 2018, has not been effective enough. Rupiah continued to lost more value.
Economists have suggested the central bank should raised the benchmark interest rate by at least 50 basis point.
In the beginning Bank Indonesia tried to save rupiah by going to the market spending some of its foreign exchange reserve to buy rupiah. The move drew criticisms from economists saying the Central Bank should not rely only on the strength of its foreign exchange reserve.
Bank Indonesia is expected to raise its benchmark interest rate by another 25 basis points in its next monthly meeting in June. (*)
COPYRIGHT © ANTARA News Jawa Timur 2018
"Describing our present situation as if we are about to plunge into crisis is out of proportion," Darmin Nasution said here on Thursday.
Shrinking rupiah value against the U.S. dollar would not drive us to the brink of crisis, he added speaking after the ceremony installing a new Governor of Bank Indonesia Perry Warjiyo.
He said economic crisis came when the domestic real sector is jolted with impact on the monetary sector.
He said he agreed that the present condition of the economy need serious addressing by the government.
"Not that bad, but indeed, the situation needs serious addressing and monitoring. That, I agree," he said.
The national currency has from early this year continued to weaken and now it almost hit the level of 14,200 per U.S. dollar.
Based on data at the Central Bank, rupiah had lost much of its value weakening 4.53 percent until May 21, 2018 (year to date) hitting the lowest level since 2015.
Bank Indonesia has raised its benchmark interest 7-Day Reverse Repo Rate by 25 basis points to 4.5 percent hoping to prop up the currency.
However, the increase decided in a regular monthly meeting of the Central Bank's Board of Governors on May 16-17, 2018, has not been effective enough. Rupiah continued to lost more value.
Economists have suggested the central bank should raised the benchmark interest rate by at least 50 basis point.
In the beginning Bank Indonesia tried to save rupiah by going to the market spending some of its foreign exchange reserve to buy rupiah. The move drew criticisms from economists saying the Central Bank should not rely only on the strength of its foreign exchange reserve.
Bank Indonesia is expected to raise its benchmark interest rate by another 25 basis points in its next monthly meeting in June. (*)
Editor : Slamet Hadi Purnomo
COPYRIGHT © ANTARA News Jawa Timur 2018