Sri Mulyani Has Spoken Out About Rupiah's Depreciation, Such As The Impact On The State Budget

Illustration (Photo: Doc. Ministry of Finance)

JAKARTA Minister of Finance (Menkeu) Sri Mulyani revealed that the current weakening of the rupiah exchange rate tends to be unavoidable because it comes from external factors.

According to him, this condition cannot be separated from the policy of the US central bank, The Federal Reserve, which continues to aggressively raise the benchmark interest rate so that the dollar becomes stronger than other countries' currencies. The Minister of Finance also ensured that weakening did not only happen to the rupiah but also to a number of world currencies.

"If we see that the strengthening of the dollar occurs globally and surely in this case the rupiah will also be affected," he said when giving a press statement regarding the realization of the APBN, quoted by the editor on Monday, October 24.

According to the Minister of Finance, this situation clearly has its own influence on the State Revenue and Expenditure Budget or APBN.

"From the state budget side, state revenues with a nominal foreign exchange will definitely increase in rupiah, such as oil and gas taxes and from others," he said.

On the other hand, pressure arises when the government conducts spending on necessities whose payment instruments use foreign currencies.

"In shopping, we see that there is pressure on subsidized expenditures (purchase of imported fuel) and also debt interest," he said.

For this reason, continued the Minister of Finance, the government chose to put a brake on debt withdrawals that were deemed inconsequential in order to maintain good health in the state budget.

"There has been a sharp decline in debt issuance which will make our interest spending in the APBN lower," he said.

In fact, the state treasurer noted that the value of financing realization had decreased by 29 percent until the close of the third quarter of 2022.

This is good because our strategy is anticipatory with a situation that is not globally conducive through debt securities issuance. This is what causes us to be quite protected now," he explained.

For information, until last month the State Budget still posted a steady performance with a surplus of IDR 60.9 trillion. This incision extends the surplus achievements that have occurred since last January.

Meanwhile, the government's debt position until August 2022 was at IDR 7,236.61 trillion with a gross domestic product (GDP) ratio of 38.30 percent.