A member of Commission XI of the Indonesian House of Representatives,\nKamrussamad, has assessed that the pressure on the rupiah is a\nconsequence of the national economic structure. Over the last two\ndecades, he stated, the Indonesian economy has remained reliant on\nforeign currency-based external financing.<\/p>\n
According to the Gerindra Party politician, this condition is\nreflected in Indonesia\u2019s current account balance, which has more often\nrecorded a deficit over the long term. He therefore considers it\nnecessary to take strategic steps to reduce dependence on the US dollar\nand other foreign currencies.<\/p>\n
\u201cThe pressure on the rupiah today is indeed caused by our economic\nstructure over the past two decades, which has been more supported by\nforeign loans based on foreign currency. This is evident from our\ncurrent account balance, which has more often experienced a deficit,\u201d\nKamrussamad said in a statement quoted on Friday (5\/6).<\/p>\n
According to him, one step the government can take immediately is to\nreactivate the local currency settlement (LCS) scheme. The scheme has\npreviously been agreed upon by Indonesia and several trading partner\ncountries, such as China, Japan, Malaysia, and others.<\/p>\n
Kamrussamad is of the view that the use of local currencies in\nbilateral trade transactions can reduce the need for US dollars. Thus,\npressure on foreign exchange reserves and the rupiah exchange rate can\nbe minimised.<\/p>\n
He explained that strengthening the LCS is part of a long-term effort\nto build national economic resilience. With more trade transactions\nusing local currencies, Indonesia will have greater room to maintain\nexchange rate stability amid global economic dynamics.<\/p>\n
Kamrussamad added that the current depreciation of the rupiah must\nalso become a momentum to overhaul the economic structure\ncomprehensively. Apart from reducing dependence on foreign\ncurrency-based financing, the government needs to strengthen productive\nsectors capable of generating foreign exchange sustainably.<\/p>\n
He is optimistic that various policies the government has pursued,\nincluding the implementation of the export proceeds foreign exchange\n(DHE) policy, will have a positive impact on increasing national foreign\nexchange reserves. However, he noted, the results cannot be felt\ninstantly and require time.<\/p>\n
\u201cThe implementation of the export proceeds foreign exchange policy,\nwhich is now underway, will help increase our foreign exchange reserves.\nBut everything does take time,\u201d he said.<\/p>\n
Kamrussamad believes that a combination of strengthening foreign\nexchange reserves, optimising the LCS, and improving the national\neconomic structure will form an important foundation for maintaining\nrupiah stability in the future. \u201cWe must strengthen our own economic\nfoundation. If the economic structure becomes stronger, the rupiah will\nalso be more resilient in facing various external pressures,\u201d he\nconcluded.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/rupiah-under-pressure-as-legislator-says-indonesian-economy-still-dependent-on-foreign-currency-financing-1780645843", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }