Purbaya views rupiah weakening as not reflective of Indonesia's economic fundamentals

Jakarta (ANTARA) - Finance Minister Purbaya Yudhi Sadewa believes that the weakening of the rupiah exchange rate does not reflect a deteriorating condition in Indonesia’s fundamental economy. On the contrary, the domestic economy remains relatively strong compared to other countries in the region. “But for me, this (rupiah weakening) is not a sign of deterioration or triggered by a worsening domestic economy. Compared to other countries, we are still strong. Even compared to Malaysia, Thailand, and others, we are still strong,” he said during a media briefing in Jakarta on Friday. The Finance Minister explained that the dynamics of the rupiah’s weakening are more influenced by global factors and market expectations. From the Ministry of Finance’s perspective, it will continue to strive to dampen disruptions or “noise” that trigger negative perceptions of the Indonesian economy. One of the steps taken is to close potential leakages in the tax system and ensure that policies are implemented more effectively. Furthermore, several issues that previously caused controversy, including certain tax policies, have been straightened out to reduce uncertainty in the market. The State Treasurer further emphasised the importance of managing public and market players’ expectations. According to him, circulating negative sentiments can worsen perceptions of the rupiah, even though the fundamental economic conditions have not changed. “What is clear is that our economic foundation has not changed. In fact, it will grow even faster because we will be more serious about fixing the obstacles in the economy. And this is also happening with ‘noise’ that seems to depict our economy heading towards collapse in the coming months,” he explained. As is known, the rupiah exchange rate closed stronger by 57 points or 0.33 percent at Rp17,229 per US dollar from the previous close at Rp17,286 per US dollar.