Sri Mulyani Expressed The Reason The US Economy Remains Tough Even Though There Are Many Dollars Printed

Minister of Finance Sri Mulyani (Photo: Antara)

JAKARTA - Finance Minister Sri Mulyani Indrawati revealed the reason the United States (US) economy was not affected by inflation even though it scored many dollars because it was a step to stabilize the economy or as a form of countercyclical.

This was revealed when Sri Mulyani became a guest lecturer and gave her first lecture in Economic Science at the Faculty of Economics and Business, University of Indonesia, Monday, August 26.

Sri Mulyani emphasized that the US is currently being hit by inflation and has shocked the world, even though it has gradually slowed down.

"How come the US can print a lot of money but also get inflation? Inflation that occurred in 2022-2023 and until now it has surprised us too," said Sri Mulyani, monitored from the FEB UI YouTube, Monday, August 26.

Sri Mulyani explained that efforts to print dollars were made by the US as a form of countercyclical. This condition, once occurred during the global economic crisis in 2008-2009 and the Covid-19 pandemic as a form of boosting the weak economy.

"If the economy is weak, dongkrak uses the monetary sector by lowering interest rates and printing a lot of money and then the economy will muter. If fiscal uses a deficit, use debt," he explained.

Sri Mulyani explained that the US is one of the largest economies in the world and has privileges or privileges that other countries do not have, even from the G7 ranks.

"Now the US has a privilege that the state economy does not have even in the G7," he said.

In addition, the State Treasurer explained that the US also has a lot of monopoly on the technology sector. This condition makes the US use of the dollar as part of the power proxy in their geopolitics.

"How can you do it, ma'am? Yes, it can be because there are many other countries whose exchange rates are not credible. So many countries are voluntary in the end using the US dollar," he said.

Sri Mulyani gave an example, such as Hong Kong and Singapore, which had used dollars as state currencies. In fact, Saudi Arabia also indirectly used the US dollar as part of their petroleum export transactions. So it's not surprising that many countries rely on dollars because they don't have a central bank with a good reputation.

"The US economy is 28 percent of the world's economy. The use of the US dollar is almost 60 percent (in the world), but it has started to decline to 50 percent," he said.

Sri Mulyani added that China's emergence as a new world economic goal made the US dollar competitive and made other countries such as Indonesia look for other alternatives in the use of the currency, so that it does not depend on these countries.

"China bought a lot of US debt securities and they log in to be equal. Between the US and China it is now inseparable. This is called a geopolitical power competition, and this is where alternatives emerged," he said.