The Indonesian Rupiah has been experiencing a sustained period of depreciation against the US Dollar in recent weeks. Shedding light on the factors contributing to this devaluation, Finance Minister Sri Mulyani Indrawati expounded on the matter.
According to her, a confluence of factors in the United States (US), including a significant budget deficit and the ever-fluctuating political landscape, has led to a considerable surge in interest rates, which have reached an impressive 5%. This noteworthy development has caused the repatriation of US dollars from across the globe, as investors redirect their funds back to the US.
Consequently, the US Dollar Index has witnessed a resurgence, resulting in the devaluation of numerous global currencies, and this insight was conveyed during a Coordination Meeting involving Acting Regional Heads. This event aimed to strengthen government operations and public services while optimizing the implementation of National Strategic Programs. All of this took place on the 30th of October, 2023.
Sri Mulyani further emphasized that similar substantial pressures have also arisen in other colossal economies like China and the European Union. These pressures have cast their long shadows across nearly every nation worldwide, Indonesia included.
Nevertheless, the former Managing Director of the World Bank underscored that Indonesia’s economic landscape remains relatively robust when juxtaposed against the conditions facing other nations.
Sri Mulyani elucidated this point by stating, “This resilience is attributed to the state budget (APBN), which serves as an exceptional shock absorber. It allows us to mitigate external pressures without directly impacting our citizens.” These insights were gleaned from her official Instagram account, @smindrawati, on the 30th of October, 2023.
On this occasion, Sri Mulyani called upon regional leaders to rally behind the state budget (APBN) in its expansionary endeavors. This support aims to shield the general populace and the economy from the relentless global economic pressures.
“I hope that local governments will enthusiastically optimize their regional budgets (APBD) to bolster these expansion efforts. We, at @kemenkeuri, are steadfast in our commitment to providing unwavering support,” Sri Mulyani remarked.