Jokowi Calls on Economist to Benchmark Rupiah against Renminbi

TEMPO.CO, Jakarta - President Joko "Jokowi" Widodo called on economist to measure Rupiah's fluctuation against currencies other than the US Dollar.

"If we use the US dollar as a benchmark [to measure the rupiah fluctuation], it will always look bad. In reality, our economy is fine, while other countries' are slowing down. It's a matter of perception," Jokowi said at an economist forum in Jakarta on Tuesday, December 6, 2016.

President Jokowi explained that other currencies that should be used as benchmarks included China's Renminbi, European Union's Euro, and the Japanese Yen.

Jokowi revealed that Indonesia's largest partnership portion is with China that accounts for 11.4 percent, followed by Europe with 11.4 percent and Japan with 10.7 percent. Meanwhile, Indonesia's partnership portion with the United States is behind Japan with around 10 percent.

"The most relevant currency to benchmark Rupiah fluctuation with is our largest partner. If China is our largest partner, then Rupiah fluctuation must be measured with Renminbi. This is important to educate public that we cannot use the US Dollar as the only benchmark. It must be comprehensive," President Jokowi said. "We can't let [our partnership with the US that accounts for] 10 percent dominates our perception on the economy." 

President Jokowi added that the US economy is no longer relevant to be used as the only benchmark, as US President-elect Donald Trump has planned to implement the America First Policy. In other words, President Jokowi went on, the US policy would focus on its domestic affairs without considering their effects on other countries.

"That's how I see it. It seems that [President Trump] will implement an reflation economic policy that could result in soaring US dollar exchange. It means that rupiah-US dollar no longer reflects our economic fundamental," Jokowi explained.

ISTMAN MP