JAKARTA - Minister of Finance (Menkeu) Purbaya Yudhi Sadewa believes that strengthening the synchronization of fiscal and monetary policies is able to restore market confidence in the national economy and encourage the strengthening of the rupiah exchange rate.
Purbaya said that strong synergy between fiscal and monetary authorities is an important factor in maintaining economic stability while providing real benefits for the wider community, both at the macro and micro levels.
The synchronization in question is the increase in the attractiveness of the yield of domestic financial instruments to encourage the return of foreign capital inflows, as well as maintaining the adequacy of liquidity in the money market and the banking sector through the management of government cash that is still placed at Bank Indonesia, accompanied by an increase in the remuneration paid by BI to the government.
"Full synergy should restore market confidence to the rupiah exchange rate, so that the rupiah will increase significantly and will not weaken to a higher level than now," said Purbaya as quoted by ANTARA, Saturday, June 6.
He emphasized that the main objective of strengthening policy coordination was not only to maintain exchange rate stability, but to ensure that the positive impact could be felt directly by the community.
Purbaya gave an example, the weakening of the rupiah so far has also pressured small business actors who are still dependent on imported raw materials. This condition causes production costs to increase and ultimately has an impact on the selling price of products at the consumer level.
"I hear that tempe sellers, sellers know that their profits have been eroded or are forced to raise prices because the raw materials are still imported. What is clear is that it raises their cost of production," he said.
He is optimistic that with more coordinated and effective policies, the stability of the rupiah exchange rate will be better maintained. As a result, production cost pressures can be reduced so that the prices of various community needs become more controlled.
"With better policies later, we will see a more stable rupiah so that traders know that tempe and housewives can also feel better prices, and are no longer burdened by the burden of their lives. They do not experience a significant increase in the burden of life," said Purbaya.
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