JAKARTA Bank Indonesia (BI) does not deny that there is a strengthening of the US dollar which causes pressure on the rupiah exchange rate.

BI Governor Perry Warjiyo said that this condition did not only occur in Indonesia but also in various other developing countries, such as India and the Philippines.

"The global economic uncertainty has increased again with a tendency to risk slow growth and a higher monetary interest rate policy in developed countries," he said, quoted Friday, June 23.

According to Perry, global economic growth is estimated at 2.7 percent year on year (yoy) with a risk of slowdown, especially in the United States (US) and China.

Perry also said that in the US inflationary pressure is still high, especially because of the tightness of the labor market, in the midst of fairly good economic conditions and the pressure on financial system stability (SSK) has eased, thus encouraging the possibility of a future increase in the Federal Funds Rate (FFR).

The monetary policy is also still tight in Europe, while in Japan it is still loose. Meanwhile, in China, economic growth is also not as strong as forecasts in the midst of low inflation, thus encouraging the easing of monetary policy," he said.

Perry added that economic recovery in other developing countries, such as India, remains strong driven by domestic demand and service exports.

"The economic condition in developed and developing countries encourages the US dollar exchange rate to weaken against the currency of developed countries, but strengthens against the currency of developing countries," he stressed.

"These developments require strengthening the policy response to mitigate the risk of propagation of external resilience in developing countries, including Indonesia," concluded Perry.


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