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View all search resultsFurther escalation in the Middle East conflict could pose multi-layered economic risks to Indonesia, ranging from further capital outflows to weaker gross domestic product (GDP) growth, according to analysts and some former government officials.
According to Bank Indonesia (BI) projections, the United States Federal Reserve (Fed) will cut its benchmark interest rate by less than one percentage point this year. Nevertheless, the central bank expects the rupiah to strengthen versus the dollar.
The rupiah has strengthened against the United States dollar in the past few days, following the US Federal Reserve (Fed) decision to maintain its benchmark rate on Nov. 1, which allows emerging markets including Indonesia to gain traction on capital inflows and for their currencies to appreciate.
Bank Indonesia (BI) revealed on Friday that Indonesian foreign exchange (forex) reserves dwindled for the third consecutive month in September, but the central bank said the reserve level remained “high”.
While the current upward trend in the USDX is putting pressure on Asian currencies, the rupiah will remain relatively stable this year, buoyed by stronger policy synergy between the government and the central bank toward recovery.
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