With increasingly diverse instruments in the financial market that can maintain the supply of foreign exchange, it is expected to meet the surge in foreign exchange demand on the market.
"We see that exchange rate movements will be more secure due to deeper penetrations of the financial markets and efficiency in the foreign exchange market," Perry said at a working meeting of the House of Representatives' Budget Agency here on Tuesday.
The projection of the exchange rate of rupiah in 2020 is better than the Central Bank's estimate for the rupiah exchange rate in 2019, which is anchored in the range of
Rp14,000-Rp14,400 per US dollar.
Regarding foreign capital inflows, Perry said that in 2020 the portfolio investment flow would be heavier and support the surplus of the Indonesian balance of payments.
The balance of payments in 2020, Perry said, would also be better because of his belief that the current account deficit would decline, compared to that in 2019. This year, the Central Bank targeted the current account deficit at 2.5-3 percent of Gross Domestic Product (GDP).
Nevertheless, the Central Bank is still wary of pressure due to the dynamics of the global economy, such as the normalization of the US Federal Reserve's monetary policy, the development of trade war between the US and China, and also some global geopolitical conditions.
With an estimated exchange rate of Rp13,900-Rp14,300 by 2020, the Central Bank anchors economic growth in 2020 at 5.1-5.5 percent. While in 2019, it estimates that economic growth will be below the midpoint of 5.0-5.4 percent.
Regarding inflation in 2020, BI sets the inflation target at 2-4 percent on an annual basis.
Translator: Indra Arief/Eliswan Azly
Editor: Bambang Purwanto
Copyright © ANTARA 2019
