News - 12 September 2018

World Bank: Indonesia Reacted Well in Facing Rupiah Depreciation

Tempo/Tony Hartawan

TEMPO.CO, Jakarta - The World Bank deemed that the Indonesian government reacted well in responding to the recent rupiah depreciation. The government focuses on two main issues that acted as damage limitations, namely the fiscal deficit, and the current account deficit.

“The fact that the government considered these two issues, I think that they have responded very credibly and with a considerable approach to control the situation that arose,” said Rodrigo Chavez, Country Director of the World Bank Indonesia on Monday, September 10.

He added that the teamwork between the cabinet and central bank was also reflected positively. Chavez said that Indonesia is not the only country that is facing a difficult economic situation and has faced it pretty well.

“The Central Bank stayed independent but that does not mean there was no cooperation," he said.

However, Chavez did state that the World Bank is not able to change the prediction of Indonesia’s 5.2 percent economic growth but also maintained that he sees no considerable drop in the meantime.

Bloomberg’s data suggests that rupiah exchange rate dropped 37 points or 0.25 percent to the level of Rp14,857 per US dollar. Rupiah weakened just after it was able to maintain a strong 73 points with Rp14,820 last Friday.

Source: TEMPO.CO