RI's next budget sees rupiah at 7,500 to dollar
RI's next budget sees rupiah at 7,500 to dollar
JAKARTA (JP): The government assumes that the rupiah should
stay at around 7,500 against the U.S. dollar in the next fiscal
year starting in April 1999.
In a report to the monthly cabinet meeting on economic matters
on Wednesday, Minister of Finance Bambang Subianto said that the
calculation for 1999/2000 budget assumes that "the rupiah's
exchange rate should range between Rp 7,000 and Rp 8,000 per U.S.
dollar."
Meanwhile, Coordinating Minister for Economy, Finance and
Industry Ginandjar Kartasasmita told journalists before the
cabinet meeting that he was confident that the rupiah would
strengthen further next year.
"We are thankful for the current rupiah level that remains
stable without too much fluctuation despite the many political
jolts in recent times," he said.
The rupiah has been hovering around 7,500 to the dollar during
the past two months despite a series of bloody unrests in the
country.
The rupiah closed at 7,450 to the greenback in Jakarta trading
on Wednesday, compared to near 12,000 level in early September,
but far from the pre-crisis level of 2,450..
The finance minister also revealed in the report that the next
state budget projects inflation to fall to between 15 percent and
20 percent -- far lower than 80 percent for this calendar year.
As rupiah would remain steady and inflation rates ease,
banking interest rates should fall accordingly, added the report
which was distributed to journalists after the cabinet meeting at
the Bina Graha presidential office.
Prices of crude oil, one of the main contributors to the
budget's revenues side, should average at US$12 to $13 per
barrel, with crude oil output projected at 1.52 million barrels
per day.
The report said revenues for the next budget would be affected
by People's Consultative Assembly's decree No. XV/MPR/1998 on the
granting of stronger regional autonomy and a better distribution
of the revenues from the tapping of natural resources between the
central government and provincial administrations.
"That decree would reduce the central government's revenues
from oil and gas and other natural resources (forest and mining
royalties)," the report said.
Nevertheless, it projects that the government would earn some
Rp 12 trillion from the privatization of state firms and Rp 4
trillion in dividends from state firms.
The government targets to increase income from cigarette
excise tax, but revenues from export taxes should decline as the
government plans to cut export tax on crude palm oil. Currently
exports of this commodity is subject to 60 percent tax.
On the spending side, the budget would record an expansion in
routine expenditures as the government plans to increase the
salaries of civil servants and members of the Armed Forces.
The government would also spend a considerable amount of money
to recapitalize banks, to finance various subsidies including
those for fuel, electricity and loans to deprived sectors as well
as to fund social safety net program.
State Minister of National Development Planning Boediono said
social safety nets would still get high priority in the next
budget as such programs could directly strengthen the purchasing
power of the people.
Boediono conceded that the next budget would suffer a deficit
equivalent to six percent of the country's gross domestic
product, depending on the availability of foreign aid.
According to the finance minister's report, the government
expects to secure $9.82 billion in official foreign borrowings
consisting of $6.32 billion in cash loans and $3.5 billion in
loans tied to specific development projects.
The government would also save some $2.7 billion from the
rescheduling of sovereign debts due in 1999/2000. (rid/prb)