TEMPO.CO, Jakarta – Bank Indonesia Governor Agus Martowardojo has predicted the rupiah exchange rate against the US dollar would be in the neighborhood of Rp12,200-12,800 this year—higher than the government’s estimation of Rp12,200 per US dollar.
“That range indicates that external developments are crucial to look out for,” he said on Monday.
He opined that the government needed to anticipate the potential rise of the Fed’s interest rate and the US economic improvement. The rise of the Fed’s interest rate has caused the US dollar rate against other currencies, including the rupiah, to keep increasing.
The government must also pay attention to China’s slow economic growth of 7.2 percent and the fall in global oil prices that put pressures on commodity prices.
Agus said the government’s move to save and manage budget for fuel subsidy was the right step because it provided more fiscal space and made the government prioritize budget for infrastructure.
Fadel Muhammad, the chairman of the House of Representatives’ Financial Commission, said there was more budget allocation for infrastructure development in the revised 2015 budget plan.
The discussion on the revised 2015 budget plan will resume on Friday.
JAYADI SUPRIADIN