BI optimistic the rupiah will be more stable this year

MACROECONOMICS - JAKARTA. This year, Bank Indonesia (BI) sees the pressure on the rupiah will not be as heavy as last year. Especially after the central bank of the United States (US) or The Federal Reserve decided not to raise interest rates this year.

"At least in 2019, one thing is clearer," said Head of the BI Monetary Management Department, Nanang Hendarsah, Saturday (3/23).

Seeing the sluggish global economic situation this year, Nanang said, it was too risky for the Fed to raise interest rates. Because, the manufacturing industry in Germany and France showed weakness.

This is reinforced again by the dovish attitude of the European Central Bank (ECB). "This provides support for stability to the rupiah," Nanang explained.

The domestic situation also shows support for the strengthening of the rupiah. Starting from inflation which is maintained below 3% until economic growth is above 5%. Also, the current account deficit (CAD) is predicted to improve in the second quarter of 2019.

However, this year, two challenges can weaken the rupiah. Among other things, trade war and Brexit uncertainty. But, Nanang stressed, this pressure was short-term.