Disturbing Rupiah Strengthening, BI Continues To Monitor Uncertainty Of Global Financial Markets

Press Conference of the Board of Governors of Bank Indonesia (BI) Meeting, (Aris Nurjani / VOI)

JAKARTA - Bank Indonesia (BI) Governor Perry Warjiyo revealed that the uncertainty of the global financial market remains high amid the strong economic prospects of the United States (US).

The US economy grew strongly supported by improved domestic demand, including accommodative fiscal, and increased exports.

Perry mengatakan, inflasi AS pada April 2024 tetap tinggi sejalan dengan pertumbuhan ekonomi AS yang kuat tersebut, meski melambat dibandingkan dengan inflasi Maret 2024.

According to him, this inflation development will increase the possibility of a Fed Funds Rate (FFR) decline by the end of 2024.

At the same time, the risk of worsening geopolitical tensions since the end of April 2024 has not continued.

"These various conditions have a positive impact on the global suspension of US dollar strengthening and the decline in US Treasury yields compared to conditions in mid-April 2024, although it is still at a high level," he explained at a press conference, Wednesday, May 22.

In addition, Perry said, capital flows to developing countries occurred again and reduced pressure on the exchange rate.

In the future, Perry said, risks related to the direction of decreasing FFR and the dynamics of global geopolitical tensions still need to be observed because they can again encourage an increase in global financial market uncertainty.

"So that it suppresses the currency of developing countries, increases inflationary pressures, and reduces the prospects for world economic growth," he said.

Perry said that this condition requires a strong policy response to mitigate the negative impact of this global uncertainty on the economy in developing countries, including Indonesia.