SAMOSIR - Bank Indonesia projects that the rupiah exchange rate will strengthen against the US dollar at an average of Rp. 16,200 per US dollar in the second quarter of 2024, Rp. 16,000 per US dollar in the third quarter of 2024, and Rp. 15,800 per US dollar in the fourth quarter of 2024.
Assistant Governor of the Communications Department of Bank Indonesia (BI), Erwin Haryono, explained that the policy to increase BI-Rate 25 bps shows that there is a risk of uncertainty that is not so large. However, it still needs to be responded to by preemptive and forward looking policies.
"It is said as a preemptive and forward looking effort so that the impact (uncertainty) does not continue. There are several potential risks that must be anticipated and so that this does not happen, we will respond now. So, it is not based on the short term," he said on the sidelines of a discussion on the Latest Economic Developments and BI Policy Mix Response, in Samosir Regency, North Sumatra, Sunday, April 28.
As for the past month, the US dollar has strengthened against various other currencies, including the rupiah. This development follows the United States central bank, which signals that it will maintain a higher benchmark interest rate for longer.
According to Erwin, this change occurred because US inflation was still above the target of 2 percent and, heating up geopolitical tensions in the Middle East, which increased the risk of a spike in world oil prices.
SEE ALSO:
Erwin said that the BI-Rate interest rate increase was needed to make government bond yields more attractive than other developing countries.
According to Erwin, if BI-Rate is not raised, it is feared that there will be a sell-off by foreign investors at its portfolio which will be even heavier.
BI has intervened through foreign exchange in foreign exchange reserves. However, it is impossible to continue to rely on that. Moreover, there is an escalation of uncertainty, including geopolitical, so we think it is time for the BI Rate to be raised," said Erwin.
The English, Chinese, Japanese, Arabic, and French versions are automatically generated by the AI. So there may still be inaccuracies in translating, please always see Indonesian as our main language. (system supported by DigitalSiber.id)
