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The Government Proposed Revision on Rupiah Exchange Rate Assumption of IDR 15 Thousand per US Dollar

Jakarta, 16/10/2018 MoF - The Government and Bank Indonesia suggested that it is necessary to adjust the State Budget 2019 macro assumptions in particular the exchange rate of the Rupiah to US dollar to Rp15,000 per US dollar from previously Rp14,500.

This was conveyed by the Minister of Finance Sri Mulyani Indrawati and the Governor of Bank Indonesia (BI Governor) Perry Warjiyo at a Government working meeting with the Budget Agency (Banggar) in the DPR's Banggar meeting room, Jakarta, Monday (15/10).

"(The exchange rate) which we all have discussed in Working Comittee (Panja) A at that time wasat Rp14,500. Whereas for other macro assumptions are still the same. Based on the proposal from the Governor (BI) regarding the exchange rate range proposed was Rp14,800 to Rp15,200. Now, we would like to propose using the middle figure at Rp15,000 for the 2019 exchange rate,” suggested the Minister of Finance.

This is because Indonesia is aware of the increasingly dynamic global economic dynamics triggered, among others, by the Government of the United States (US) policy that raised interest rates, tightened US liquidity and trade wars between the United States and the People's Republic of China (PRC).

Domestically, the relatively high increase in imports over exports resulted in a deficit in the trade balance in August 2018. In addition, from the results of the IMF-WBG Annual Meetings 2018 in Bali, it has recently indicated that there will still be global economic uncertainty in 2019 but with a more positive direction than this year.
For other macro assumptions such as economic growth, oil prices per barrel, and oil lifting are projected to be the same as those discussed between the Government and the previous House of Representatives (DPR).
However, the Government's proposal has not been approved by the majority of Banggar members. Of the 15 Banggar members who delivered their responses, the majority had not agreed and requested further discussions. (btr/ind/nr)