TEMPO.CO, Jakarta - Bank Indonesia (BI) senior deputy governor Mirza Adityaswara said the country’s economic climate was mostly affected by the United States’ benchmark interest rate—a situation he argued has been evident since 2000-2018.
According to Mirza, the US interest rate fell in 2001 on the terrorist attack on the World Trade Center (WTC), but was able to recover in 2004-2005. That was the period when the rupiah started to weaken, which drove the interest rate.
He took another example that when the 2009 global crisis hit the US interest rate, the rupiah was getting stronger.
"It had a strong correlation, it has nothing to do with who the president is,” said Mirza at the Graha CIMB Niaga today.
Read: Bank Indonesia Pledges to Keep Rupiah Attractive
Meanwhile, in 2018, he said, investments began to tumble on the market's misprediction of the Fed's benchmark interest rate, which resulted in the return of capital to the US.
The Bank Indonesia senior deputy governor explained as a nation that was still experiencing a trade balance deficit, Indonesia was still in need of foreign investments, especially the US dollar.
MUHAMMAD HENDARTYO
