Purbaya: Rupiah Weakening is Influenced by Global Factors, Not Because Domestic Economy is Weakening

Minister of Finance Purbaya Yudhi Sadewa. (Photo: ANTARA)

JAKARTA - Minister of Finance Purbaya Yudhi Sadewa emphasized that the movement of the rupiah exchange rate currently does not reflect the weakening of the fundamentals of the domestic economy.

Purbaya said that the fluctuation of the rupiah was more influenced by external factors as well as the formation of market expectations, including the negative sentiment that has recently developed.

"But for me, this is not a sign of deterioration, triggered by the deterioration of the domestic economy. Compared to other countries, we are still strong," he said in a media briefing, Friday, April 24.

He assessed that Indonesia's economic conditions are still relatively solid, even relatively stronger than a number of countries in the region such as Malaysia and Thailand, which show a different trend against the US dollar.

Purbaya said the government also continued to improve policies to reduce "noise" or information that could potentially create a wrong perception of the economic condition.

He explained that the government is currently focusing on improving various obstacles in the economic sector, including closing the leakage gap in the tax system and ensuring that policy implementation runs more optimally.

According to him, several policies that had caused polemics, such as certain tax policies, had also been improved so as not to trigger uncertainty in the market.

Purbaya also highlighted the narrative that describes as if the Indonesian economy will worsen in the next few months.

According to him, this assumption is not in accordance with the actual condition and some of it comes from inaccurate information.

In addition, he emphasized the importance of maintaining public expectations and market participants, because the negative perception that is circulating can actually suppress the value of the rupiah, even though the fundamental conditions of the economy remain stable.

"What is clear is that the foundation of our economy has not changed. In fact, it will be faster, because we will be more serious about improving the constraints in the economy," he said.

Furthermore, he emphasized that the government did not intervene to deliberately weaken the rupiah for the sake of trade competitiveness.

According to him, the exchange rate, still moves in accordance with economic fundamentals, even though in the short term it can be influenced by market sentiment.

Regarding the exchange rate policy, Purbaya left it entirely to the authorities, namely Bank Indonesia, as a regulator that is considered to have the capacity to maintain stability.

"It must be asked by the central bank (bank Indonesia), later if I talk, it will be difficult. But we leave this to the manager, the manager, the regulator who we think is capable of controlling it," he explained.