Global conditions will be monitored to maintain rupiah movement: Minister

Global conditions will be monitored to maintain rupiah movement: Minister

Minister of Finance Sri Mulyani at the Habibie Award for 2018 in Jakarta on Tuesday (Nov 13/2018). (ANTARA / Calvin Basuki)

Jakarta (ANTARA News) - Finance Minister Sri Mulyani Indrawati said the monitoring of global conditions will continue to be carried out to keep the rupiah from moving against the US dollar, which is vulnerable to external pressure.

"We must be aware of the global conditions and dynamics that exist and how to maintain our economy, so that it can be absorbed," Indrawati stated in Jakarta on Tuesday.

She ensured that the movement of the rupiah, which tended to weaken, was still influenced by the situation of global uncertainty due to the normalization of the Fed`s monetary policy.

However, she ensured that the government would continue to reform economic fundamentals by reducing the current account deficit (CAD) for stabilizing the rupiah.

The reform process, she added, could increase market players` confidence in the resilience of the national economy to external turmoil.

"Regarding CAD, I think we have discussed the steps taken by the ministry of institutions and coordination with the business world, BI, and OJK in a cabinet meeting. We will continue to do it," he explained.

The movement of the rupiah exchange rate traded between banks in Jakarta on Tuesday afternoon rose slightly by two points to Rp14,828 compared to the previous position of Rp14,830 per US dollar.

"The rupiah exchange rate strengthened even though it was thin as new optimism emerged about improving trade relations between the United States and China," revealed Ariston Tjendra, Head of Monex Investindo Futures Research.

He added that there was optimism when Chinese Prime Minister Li Keqiang expressed his willingness to improve free trade through discussion.

"It is hoped that there will be a bright spot so as to increase market players` confidence in risk assets," he elaborated.

Nevertheless, the US dollar is still quite solid against the majority of the world`s major currencies because some market players are still worried about uncertainty in Europe regarding Brexit (the separation of Britain from the European Union) and the global economic slowdown.

"The flow of funds still tends to lead to `safe haven` assets such as the US dollar, a condition that is favorable for the US currency," he pointed out.

Reporting by Satyagraha
Editing by Eliswan