Indonesia sees no need to recalculate budget despite rupiah weakness

Jakarta (ANTARA) - Finance Minister Purbaya Yudhi Sadewa said that the government does not need to recalculate the state budget despite the rupiah weakening to around 17,800 per U.S. dollar.

Speaking at the headquarters of the Directorate General of Taxes in Jakarta, on Wednesday, Sadewa said the ministry had already conducted simulations for various economic scenarios, including one in which global oil prices reached US$100 per barrel.

“We have already calculated it. During the simulation where global oil prices reached US$100 per barrel, the rupiah assumption was also taken into account. So there is no problem, and I do not need to recalculate the state budget,” he said.

Sadewa also assessed that the bond market remains under control despite pressure on the rupiah, as the government has taken stabilization measures through bond buybacks to keep yields stable.

“Even though the rupiah is weakening, bond yields are declining because of government action and efforts by our colleagues at the treasury (Directorate General of Treasury) to conduct limited buybacks so that yields remain manageable,” he explained.

He added that bond market stability was crucial to maintaining foreign investor appetite for Indonesian assets.

“As long as the bond market remains under control, foreign investors’ ability to invest in our bonds will also be maintained. We have already started to see foreign capital flowing back into the market,” he said.

Sadewa also said the government is preparing further measures to significantly strengthen the rupiah, while emphasizing that the currency’s depreciation is not in line with Indonesia’s economic fundamentals.

“This is happening even though the fundamentals are good, so it actually does not make sense. Usually, a currency weakens when there are disruptions in economic fundamentals,” he stated.