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Economic fluctuations likely to continue until Fed raises rates: minister
Finance Minister Bambang Brodjonegoro (JP/Jerry Adiguna)Finance Minister Bambang Brodjonegoro predicts that the ongoing global economic fluctuations will continue until the US Federal Reserve (Fed) makes a decision on its fund rate adjustments
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Finance Minister Bambang Brodjonegoro (JP/Jerry Adiguna) (JP/Jerry Adiguna)
Finance Minister Bambang Brodjonegoro (JP/Jerry Adiguna)
Finance Minister Bambang Brodjonegoro predicts that the ongoing global economic fluctuations will continue until the US Federal Reserve (Fed) makes a decision on its fund rate adjustments.
'We predict that the global economic fluctuations are likely to continue until the Federal Open Market Committee's (FOMC) meeting takes place in September. Therefore, [until at least then] we can hopefully manage to maintain economic stability,' he said as quoted by Antara in Jakarta on Wednesday.
The minister further asserted that currently, Indonesia's economic stability was being controlled well and that no macro indicators were showing any sign of crisis, unlike [the lead-up to] the 1998 financial crisis.
'Our economic growth remained positive in the first semester of 2015, at 4.7 percent. Our trade balance saw a surplus and there was a decline in total deficit. So, overall, our macro condition is still good,' said Bambang.
He further explained that in the banking sector, the ratio of non-performing loans (NPL) and the capital adequacy ratio (CAR) were both in healthy condition. 'The conditions are totally different to how they were in 1998,' said the minister.
Commenting on the People's Bank of China's (PBoC) latest decision to cut its interest rate by 25 basis points, Bambang said it did not directly affect Indonesia's economy.
He said the PBoC's latest move would have more of an impact on the internal situation in China, where it aimed to encourage consumption by the country's people to increase its economic work performances which had suffered a slowdown.
'It will have more of an influence on us if China devalued its currency and the Chinese government will likely continue to devalue its currency because the yuan is still overvalued,' said Bambang. (ebf)
