Finance Minister Purbaya Yudhi Sadewa has finally spoken out regarding the recent phenomenon of the Rupiah's depreciation against the US Dollar. In his statement, he dismissed the notion that the national currency's decline was caused by weak domestic economic fundamentals.
According to Purbaya, the drop in the exchange rate was mostly driven by excessive negative market sentiment. He expressed regret over narratives from several analysts that tend to spread panic regarding national economic stability, even though fundamental Indonesian economic indicators remain in quite good condition.
Furthermore, Purbaya clarified the authority regarding currency stability. He emphasized that the main task of controlling the Rupiah exchange rate is the responsibility of Bank Indonesia (BI) as the monetary authority. He stated his reluctance to bear the brunt of criticism over the weakening, as monetary policy falls outside the mandate of the Ministry of Finance.
Although there is collaboration within the Financial System Stability Committee (KSSK)—which includes the Ministry of Finance, BI, OJK, and LPS—Purbaya stressed that his ministry continues to respect Bank Indonesia's independence. He stated that the government cannot intervene in the policies adopted by the central bank to manage financial system stability.
Purbaya concluded his statement by reiterating the government's confidence in Bank Indonesia's capacity. According to him, BI possesses sufficiently sophisticated tools and expertise to manage exchange rate dynamics amidst current global economic uncertainties.
