REPUBLIKA.CO.ID, JAKARTA -- Indonesia's economic fundamentals are good, but we need to be careful while dealing with the global economic dynamics, President Joko Widodo (Jokowi) stated here on Wednesday (11/3).
"This afternoon, we meet again to discuss the current global economic developments despite the fact, as I have said, that our economic fundamentals are good," he said while opening a meeting with the finance minister, Bank Indonesia governor, chief economic minister, and the chairman of the Financial Services Authority.
The officials at the meeting will discuss the current global economic developments and anticipatory measures to be taken by Indonesia.
President Jokowi pointed out that Indonesia's economy is improving, and the share prices are also increasing while capital market conditions also continue to improve.
"I think our fiscal condition is also far better as compared to last year," he emphasized.
The president called on all parties to stay optimistic regarding Indonesia's economy as it will grow better this year, although he reiterated that "we must remain careful and alert."
In view of that, Jokowi remarked that he had held the meeting to receive direct feedback from the concerned officials regarding the nation's current economic situation.
"Although we already met last night, I think we need to discuss the issue again this afternoon," he stressed.
President Jokowi held a limited cabinet meeting on Tuesday evening to discuss the current depreciation of the rupiah.
"After arriving from his visit to the regions, the president wanted to know the current condition of the rupiah," Coordinating Minister for Economic Affairs Sofyan Djalil stated after the meeting.
"At the meeting, Bank Indonesia senior deputy governor explained about the current condition of the rupiah. Right now, it is recorded as the world's fifth-worst currency," he noted.
He remarked that current depreciation of the rupiah differs from that observed in 1998 when the cause of the problem was domestic, while this time it is external.
Sofyan, however, noted that in comparison to other currencies such as the euro, the rupiah is strengthening because the condition of the US dollar is extremely good.
He stated that the United States will increase its interest rate in July after it flooded huge amount of dollars into the market following the financial crisis in 2008 in a bid to stimulate its currency across the world, including in Indonesia.
"The United States now plans to absorb its dollars again by raising the interest rate in July," he noted.
Sofyan stated that in the short term, the government will accelerate investment, ease business, and improve the licensing procedures as well as eradicate investment obstacles to overcome the depreciation of the rupiah.
He affirmed that the government would also offer tax incentives to foreign companies investing in Indonesia.
He noted that President Jokowi wanted to make the rupiah more stable although all other countries too wanted to strengthen their currencies.
Besides Djalil, the meeting was also attended by Trade Minister Rahmat Gobel, Minister/State Secretary Pratikno, Finance Minister Bambang Brodjonegoro, and Bank Indonesia senior deputy governor and the director general of taxation.
The rupiah traded at 13,161 as compared to its earlier recorded value of 13,083 per US dollar on Wednesday morning.
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