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Ada Pertanyaan? Hubungi Kami Robert Sidauruk, Fathan Qorib
While still weeks before Joko Widodo’s (Jokowi) inauguration, investors are expecting that the soon-to-be seventh President of Indonesia, will address the rupiah’s recent weakening against the US dollar.
Investor concerns were elaborated by Tirta Segara, Executive Director for the Communication Department at Bank Indonesia (BI), who said that there are at least two main issues facing Jokowi’s administration.
The first is the composition of the cabinet, and the second the working program to adjust the price of subsidized fuels. Mr. Segara believes that many investors are in a “wait-and-see” mode to see how the new cabinet is formed. Current circumstances have been having a negative impact on the rupiah’s exchange rate against the US dollar.
“On average, the rupiah’s exchange rate has weakening by 4% on a point-to-point basis, and closed at IDR 12,185 per US dollar,” informed Mr. Segara in Jakarta on Tuesday.
In regard to plans to increase the price of subsidized fuel by the new administration, Mr. Segara contends that BI has calculated the potential inflationary affects that may arise. If increased, along with the price of electricity and 12 Kg Liquefied Petroleum Gas (LPG), Mr. Segara believes that the inflation rate should not go beyond 4.5%-5.5%. This is seen as a realistic calculation, provided there are no substantial broader price increases.
“If there is no increase to other administered prices, we are optimist that the predicted inflation rate will be realized,” said Mr. Segara.
To reduce the potential impacts of inflation on the public, Solikhin, Director for Economic Monetary Policy Department at BI, explained that BI will take proportional responses to ensure the inflation target for 2015 can be achieved.
According to Mr. Solikhin, any social unrest as a result of an increase in fuel prices will only last for a short time, approximately two to three months. For example, if fuel subsidies are reduced in November this year, any impacts experienced by the public should only last until December. Afterwards, the inflation rate should gradually decrease starting January 2015.
“BI will pursue an inflation rate set at more or less 4%,” concluded Mr. Solikhin.
(hot/kc)
Robert Sidauruk, Fathan Qorib
While still weeks before Joko Widodo’s (Jokowi) inauguration, investors are expecting that the soon-to-be seventh President of Indonesia, will address the rupiah’s recent weakening against the US dollar.
Investor concerns were elaborated by Tirta Segara, Executive Director for the Communication Department at Bank Indonesia (BI), who said that there are at least two main issues facing Jokowi’s administration.
The first is the composition of the cabinet, and the second the working program to adjust the price of subsidized fuels. Mr. Segara believes that many investors are in a “wait-and-see” mode to see how the new cabinet is formed. Current circumstances have been having a negative impact on the rupiah’s exchange rate against the US dollar.
“On average, the rupiah’s exchange rate has weakening by 4% on a point-to-point basis, and closed at IDR 12,185 per US dollar,” informed Mr. Segara in Jakarta on Tuesday.
In regard to plans to increase the price of subsidized fuel by the new administration, Mr. Segara contends that BI has calculated the potential inflationary affects that may arise. If increased, along with the price of electricity and 12 Kg Liquefied Petroleum Gas (LPG), Mr. Segara believes that the inflation rate should not go beyond 4.5%-5.5%. This is seen as a realistic calculation, provided there are no substantial broader price increases.
“If there is no increase to other administered prices, we are optimist that the predicted inflation rate will be realized,” said Mr. Segara.
To reduce the potential impacts of inflation on the public, Solikhin, Director for Economic Monetary Policy Department at BI, explained that BI will take proportional responses to ensure the inflation target for 2015 can be achieved.
According to Mr. Solikhin, any social unrest as a result of an increase in fuel prices will only last for a short time, approximately two to three months. For example, if fuel subsidies are reduced in November this year, any impacts experienced by the public should only last until December. Afterwards, the inflation rate should gradually decrease starting January 2015.
“BI will pursue an inflation rate set at more or less 4%,” concluded Mr. Solikhin.
(hot/kc)