REPUBLIKA.CO.ID, JAKARTA -- Indonesia's rupiah has appreciated because of the improving global economy, stated Finance Minister Chatib Basri.
However, the rupiah is not alone, as we have also seen that the Brazilian real, Turkish lira, and South African rand also appreciated. But indeed, the rupiah's appreciation is the sharpest, he noted here on Friday.
Chatib explained that the rupiah appreciated shortly following the recent statement released by Fed's new Chief, Janet Yellen, and also due to the improvement in the Indonesian economy, which was able to match market expectations.
He emphasized that the country's economy has improved due to the effectiveness of several economic policies that were adopted in mid-2013, which led to a reduction in the country's current account deficit.
"Our data matches market expectations. This has been possible because of the implementation of effective policies. If we calmly view the problem, every time a slowdown occurs, there is also an impact on the current account deficit," he reported.
In this regard, he stated that the government will strive to maintain the continuity of the current account deficit at the end of 2013, which is forecast to reach 3.2 percent of the GDP, by consistently implementing the policy.
"We will continue implementing the policy, which we had earlier made to reduce imports, as the deficit is still above three percent. We will again change our policy only after the deficit is down to 2 to 2.5 percent," he noted.
Chatib forecast that the deficit will hover around two percent of the GDP in 2014, due to the improving economic data, hence, it is hoped that the rupiah too will not fluctuate.
"I think we need not reduce it up to one percent because the growth can be below 5.5 percent. If it is below 5.5 percent, unemployment rate will rise. So, we must maintain it," he added.
On Friday morning, the rupiah exchange rate at interbank transactions appreciated 89 points to reach Rp11,886 against the US dollar, from Rp11,975, after lingering at around Rp12 thousand for the past few months.
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