Bakom RI: Strong industry is a foundation for strengthening the rupiah

Strengthening the industrial sector is one of the key foundations for reinforcing the rupiah exchange rate over the long term, according to Fithra Faisal Hastiadi, Principal Expert at the Government Communication Body (Bakom) of the Republic of Indonesia.

Speaking at a discussion in Jakarta on Thursday, Fithra said monetary policy by Bank Indonesia (BI) remains important, particularly in facing short-term pressures.

However, he argued that monetary policy cannot be the sole instrument for addressing structural problems in the economy.

Fithra said the issues that need to be tackled to strengthen the rupiah’s fundamentals are the condition of industry and national production capacity.

For that reason, he argued that strengthening industry is important as part of efforts to improve economic fundamentals.

Meanwhile, he added that monetary policy still needs to be implemented proportionately to respond to short-term economic pressures.

On the other hand, Fithra also stressed the importance of maintaining Bank Indonesia’s independence, particularly to preserve market confidence and institutional credibility.

“They must be in the same rhythm. Harmony. A fiscal and monetary mix,” Fithra said.

According to him, coordination between the government and BI does not necessarily reduce the central bank’s independence as long as BI retains operational authority in determining and implementing its monetary policy.