On IHSG and Rupiah Weakness, Purbaya: Indonesian Economy Remains Expansionary

The Indonesian economy is currently in expansion. We are protecting consumer purchasing power at all costs. Forget about a crisis or recession – we have not even begun to slow down. We are still expanding, still accelerating. That is what we are continuing to protect in the coming weeks,” said Finance Minister Purbaya Yudhi Sadewa to journalists in Jakarta on Monday.

Finance Minister Purbaya Yudhi Sadewa has urged the public not to be concerned about the weakness in the Composite Index (IHSG) and rupiah exchange rate, given that the national economy remains expansionary.

As of Monday afternoon’s trading, the IHSG closed down 248.32 points or 3.27 per cent at 7,337.37. The LQ45 index of 45 blue-chip stocks fell 25.47 points or 3.28 per cent to 750.57. The rupiah weakened 24 points to Rp16,949 per US dollar compared to the previous close of Rp16,925 per dollar. During trading, the rupiah weakened as much as 70 points.

Purbaya noted that Indonesia has sufficient experience with several previous crises, including the 1998 monetary crisis, the 2008 financial crisis, and the crisis caused by the COVID-19 pandemic in 2020. With this diverse experience, Purbaya is confident the government is capable of preparing mitigation measures against potential economic shocks.

“So, stock market investors should not be afraid. We are protecting our fundamentals well. Based on our experience in 2008 and 2020, we were able to maintain economic growth momentum,” he said.

Purbaya stated that consumer purchasing power remains secure and the economy is far from crisis. He conducted a surprise inspection at Tanah Abang Market in Jakarta after hearing speculation that the national economy was heading towards recession.

According to Purbaya, various economic indicators show that the national economy is in good condition. Regarding potential economic pressure from the conflict between Iran, the United States, and Israel, Purbaya ensured that the government would implement policies to mitigate the impact of oil price spikes if prices exceed those covered by the state budget (APBN).

The state budget, he said, will be prepared as thoroughly as possible to act as a shock absorber for economic volatility. He also has no plans to raise subsidised fuel (BBM) prices amid rising global oil prices, saying that fiscal budget capacity is still sufficient to absorb current shocks.