BI Governor Asks Public Not to Fret over Rupiah Depreciation

TEMPO.CO, Jakarta - Bank Indonesia governor Agus Martowardojo has called on the public not to worry about the rupiah depreciation, which has reached 1.5 percent from January to March.

“If there is any volatility or fluctuation away from its fundamental value, Bank Indonesia will surely be present,” he said in Bank Indonesia office area, M.H. Thamrin, Central Jakarta, Friday, March 9.

Agus said Indonesia's reputation as a country that boasts macroeconomic and financial stability is still intact. He added the country's economic growth and inflation rate were in good condition.

Agus explained, learning from what happened in 2017, he was upbeat the central bank could meet the economic growth target.

“Bank Indonesia is still confident that our economic growth will remain at 5.1 to 5.5 percent by 2018,” he said.

Agus said the central bank had also conducted surveys in 82 cities involving 164 markets. The results revealed inflation was in the neighborhood of 0.14 percent or around 3.31 percent per year. He explained the government's decision to maintain fuel and electricity prices would also help it safeguard the inflation rate.

Agus said among the reasons of the rupiah depreciation was the recent speech of Fed governor Fed Jerome Powell indicating higher Fed Fund Rate (FFR) by more than three times a year.

He added anoter reason behind the rupiah depcreciation was the policy of U.S. President Donald Trump on increased import tariffs on steel and aluminum. This policy affects all countries excluding Canada and Mexico, which are presently amid talks with the U.S. on the North American Free Trade Agreement (NAFTA). 

M YUSUF MANURUNG