With the increasing foreign capital inflows, the central bank believes the rupiah`s exchange rate will remain stable despite the onslaught of external risks.
BI Governor Agus Martowardojo said here on Friday, the rise in foreign capital inflows was fueled by the country`s strong economic fundamentals as reflected in the low inflation rate of 3.61 percent year-on-year in 2017 and the current account deficit projected to reach less than 2 percent of the national gross domestic product in 2017.
In addition, the rising foreign capital inflows were also related to the country`s sovereign rating. Indonesia won a second sovereign rating upgrade last year, with Fitch Ratings raising its assessment to the second-lowest investment grade.
"So, we can observe foreign investors` interests in the Indonesian economy. I want to say that in general, our condition is good," he noted.
He stated that macro-economic stability until the end of January 2018 remains good despite pressure on the inflation rate due to rising food prices in January.
However, pressure from volatile food prices is under control and within the inflation rate target of 2.5-4.5 percent for 2018, he noted.
Based on the result of a survey conducted by BI on food prices in the fourth week of January, the monthly inflation rate is estimated to reach 0.73 percent this month.
Reported by Indra Arief Pribadi
(T.S012/B/KR-BSR/B/H-YH)
Reporter: antara
Editor: Heru Purwanto
Copyright © ANTARA 2018
