The Jakarta Post
Coordinating Economic Minister Darmin Nasustion was not worried about the rupiah's depreciation, arguing that the currency's weakening was reasonable because of external negative sentiments.
He cited the heating trade war between the United States and China as the main cause of the rupiah's depreciation.
“The international situation is not conducive and that always affects emerging countries. It is like what happened last year. It depends on Donald Trump and Xi Jinping,” Darmin said in Jakarta on Tuesday as reported by kontan.co.id.
He said Indonesia's need for US dollars had increased in April and May because of dividend payouts by corporations.
The Jakarta Interbank Spot Dollar Rate (JISDOR) recorded a weakening rupiah in the last five days -- Rp 14,444 per US dollar on Tuesday, Rp 14,362 on Monday, Rp 13,347 last Friday, Rp 14,338 last Thursday and Rp 14,305 last Wednesday.
Institute for Development of Economics and Finance (Indef) senior economist Enny Sri Hartati, however, said the weakening was not only because of external factors but because of poor domestic economic data.
She even believed that the rupiah's weakening was triggered by market players’ pessimism on the possible trade deficit in April.
“In April, the trade balance very likely will be a deficit because imports will increase ahead of Idul Fitri,” Enny said.
The other negative domestic sentiment was the US$200 million decline in foreign exchange reserves to $124.3 billion in April, she added.
Darmin agreed with Enny about the possible trade deficit in April but believed it would not happen in May.
“It seems that our trade balance will be in deficit in April, but in May our oil and gas imports will be different because [state-owned energy holding company] Pertamina will be able to fulfill the domestic needs in Solar-branded diesel and avtur,” Darmin said. (bbn)