JAKARTA - Minister of Finance Purbaya Yudhi Sadewa spoke out regarding the weakening of the rupiah exchange rate against the United States dollar (USD).
For information, based on Bloomberg data as of 13.54 WIB, the rupiah was at the level of Rp18,046 per US dollar, weakening 79.00 points or 0.44 percent compared to the previous trading.
Purbaya emphasized that managing exchange rate stability is the responsibility of Bank Indonesia (BI).
Responding to the possibility of holding a meeting of the Financial System Stability Committee (KSSK) due to pressure on the rupiah, he assessed that the current conditions did not require such a step.
"Later you will see me panic. Basically BI is still running activities well and everything is still under their control. I handed over the rupiah to them," he told the media, Thursday, June 4.
However, Purbaya admitted that the weakening of the rupiah has the potential to increase the burden of foreign debt payments if calculated in domestic currency, because although the value of the coupon or interest on debt in US dollars remains, the amount of rupiah needed to meet the obligation will increase when the exchange rate weakens.
"Actually, the coupon should be fixed, but if he sells it in debt payment, it will be through the coupon. The coupon is constant. However, when the rupiah weakens, it will increase in rupiah payment," he said.
He added that the risk had been included in various simulations carried out by the government when preparing the State Budget.
Therefore, Purbaya said that the current condition is still within the limits that can be anticipated and does not threaten the sustainability of the state budget.
He emphasized that when preparing the state budget, the government used an exchange rate assumption of Rp16,500 per US dollar, and the government has also taken into account various scenarios of economic changes, including the possibility of a weakening of the rupiah and an increase in energy prices.
"This is, at the time of the first state budget, what is the assumption? Rp. 16,500, yes? But there is always a simulation when the fuel price rises high, right? Yes, we calculate it there. The adjustment is quite high, but I didn't mention it later that the rupiah will weaken significantly," he said.
Purbaya assessed that the rupiah's fundamentals are actually stronger than the current level.
"But basically, the fundamental of the rupiah is below the current level, stronger than it is now," he said.
He added that to maintain financial market stability, the government also intervened in the government bond market.
The steps are carried out by buying back (buyback) debt securities issued by foreign investors, and it is hoped that this will help maintain the stability of the bond market as well as support BI's efforts to maintain the rupiah exchange rate.
Purbaya revealed that the value of interventions in the bond market reached more than Rp8 trillion.
"Maybe Rp. 8 trillion more in bonds," he said.
According to him, this policy has a positive impact on the movement of the yield of Government Securities (SBN), especially the 10-year reference tenor.
Purbaya emphasized that the government actually did not plan to reveal the update on the realization of this policy to stabilize the bond market.
"It's okay, just so you know, I intervened a little. Then 10 years is relatively stable or tends to go down. So, the impact is there to our debt," he said.
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