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Brexit not significant threat to Indonesia: BI
The effect of a possible withdrawal by the UK from the EU, known as “Brexit”, is unlikely to have a significant effect on the Indonesian economy, a senior central bank official has said.
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A copy of the satirical Private Eye magazine is displayed for sale with a Brexit themed cover in a store in London onJune 8. (AP/Matt Dunham)
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he effect of a possible withdrawal by the UK from the EU, known as “Brexit”, is unlikely to have a significant effect on the Indonesian economy, a senior central bank official has said.
Bank Indonesia (BI) deputy governor Perry Warjiyo said that according the central bank's assessment, although the result of a UK vote on its EU membership, scheduled on June 23, would impact the global economy, the impact on emerging economies would be limited. "So far we believe that the impact will not be significant on Indonesia," Perry said on Friday.
He said BI expected Indonesia's macro economy to remain resilient and healthy despite the turmoil in the global economy in recent years. The government's series of economic policy packages and BI's monetary and macro prudential easing will further strengthen the economic growth in the country, he said.
"These three things will withstand the impact of Brexit on Indonesia so the impact will not be too significant," he added.
According to Perry, Brexit will only cause global investors to shift from UK bonds to other safe markets, such as the EU. In addition, it will cause the British pound to depreciate, while at the same time, the euro is likely to appreciate.
