Other currencies also experience depreciation: Central bank

Jakarta (ANTARA News) - Bank Indonesia Governor Perry Warjiyo said rupiah depreciation is no cause for much concern as the currencies of other developing economies also are experiencing depreciation against the US dollar.

"We must not see as if Rp15,000 (per dollar) is the end of the world. We should make comparison with other countries," Perry said addressing a seminar here on Wednesday.

The phenomenon of falling value of national currency is also faced by other developing countries, such as Turkey, Brazil, South Africa, India and the Philippines , he said.

Since the end of December, 2017 rupiah lost 9.82 percent of its value. Rupiah still fared better compared with that of Turkey losing 37.7 percent, that of Brazil losing 17.6 percent, South Africa 13.8 percent, and India 12.4 percent, he said.

"It was a global phenomenon as a result of the market response to the Fund Rate increase by the Feed, and trade war," he added.

He said one mid long term efforts that could be taken to keep rupiah from losing more value by reducing the current account deficit.

He said redressing the current account balance is not very pressing under normal economic condition, but it becomes crucial under turbulent condition.

"That is why we could not be compared with Thailand as they have a surplus of US$54 billion in their current account balance that their currency remains stable," he said.

He said a cut in the current account deficit would contribute to rupiah strengthening.

He said he was optimistic in 2019, the pressure in rupiah globally and domestically would not be as hard and difficult as this year.

He said the US Central Bank, The Fed, would not raise its fund rate as many times as this year.

This year the Fed raises its fund rate four times and next year it plans to raise its fund rate only twice and in 2020 once.

In addition the global condition is expected to improve in 2019 as portfolio investors would return to developing economies to invest, he said.

Meanwhile, efforts by the government in reducing the current account deficit is expected to begin to bear fruit in 2019, he said.

Source: ANTARA News

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