BI: No Worries About Current Account Deficit

TEMPO.CO, Jakarta - Bank Indonesia (BI) Governor Perry Warjiyo appealed to all parties not to worry about the state’s current account deficit (CAD). The vital point is, he added, the government is capable to maintain the flows of foreign investment entering the country.

“Our CAD is at around 3 percent, and it’s okay, don’t worry,” said Perry at Aryaduta Hotel, Jakarta, Wednesday, January 30. In the fourth quarter of 2018, for example, the country’s capital account experienced surplus, which prompted a rebound of rupiah exchange rate against the US dollar at Rp14,000 from previously touched on Rp15,000.

At present, Perry opined, the exchange rate is still undervalued and will see better performance in line with the improvement of the Indonesian economy. “The economy of Indonesia grows higher, the inflation is under control, and foreign interest rates will not be higher.”

Besides, the rupiah exchange rate is related to the balance of payments. Perry said that there would be a US$5 billion surplus in the state's balance of payments for the fourth quarter of 2018. The figure is a huge rebound after the deficits in quarters two and three.

Finance Minister Sri Mulyani Indrawati earlier said that the CAD is not a sin as long as it could be controlled in a bid to support the economy.

CAESAR AKBAR | ANTARA