Strengthening Economic Resilience
The pressure on the rupiah exchange rate has been immense given the high economic temperature. Even though in the past weeks the pressure has begun to decline, it does not mean the storm has passed, as the potential for shocks that have triggered the weakening of the rupiah still remain.
An Indonesian Rupiah note.
The pressure on the rupiah exchange rate has been immense given the high economic temperature. Even though in the past weeks the pressure has begun to decline, it does not mean the storm has passed, as the potential for shocks that have triggered the weakening of the rupiah still remain.
Externally, the United States Federal Reserve (the Fed) will raise its benchmark interest rate at least twice more. It is feared the US’ policy normalization will trigger massive outflows of foreign funds from Indonesia. Not to mention the impact of the US and China trade wars, which could result in the decline of various commodity prices. Indonesian commodity exports will certainly face more challenges. As a result, it will be difficult to avoid the risks of a trade deficit.