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PDI-P warns gov't against overestimating rupiah depreciation in 2025 budget

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Jakarta Globe - August 20, 2024

Arnoldus Kristianus, Jakarta – The Indonesian Democratic Party of Struggle (PDI-P) faction has urged the government to reconsider its macroeconomic assumptions regarding the rupiah's exchange rate. In the 2025 state budget draft (RAPBN), the rupiah is projected at Rp 16,100 per US dollar, a figure deemed inconsistent with global economic conditions.

"The assumption of the rupiah does not align with our efforts to strengthen the currency and the global trend of monetary easing expected in 2025," said Adisatrya Suryo Sulisto, a member of the House of Representatives (DPR) from the PDI-P faction, during a plenary session on Tuesday.

Adisatrya pointed out that the rupiah has already returned to around Rp 15,000 per US dollar. However, the government has set the 2025 exchange rate assumption at Rp 16,100 per US dollar, which contradicts the agreement between the government and the DPR when drafting the 2025 Macro Economic Framework and Fiscal Policy Principles (KEM PPKF), where the rupiah was estimated to range between Rp 15,300 and Rp 15,900 per US dollar.

"Therefore, the PDI-P faction believes the government should revert to the KEM PPKF agreement," Adisatrya said.

Meanwhile, Vera Febyanthy, a DPR member from the Democratic Party faction, said that the government must anticipate the impact of global economic conditions on the stability of the rupiah. She noted that the US Federal Reserve's (The Fed) interest rates remain high, which could lead to capital outflows from developing countries, affecting exchange rate stability.

"The Democratic Party faction believes that the government and Bank Indonesia should remain vigilant about global economic uncertainties, particularly the still-high Fed interest rates, as well as geopolitical situations that could impact the exchange rate in 2025," she said.

Source: https://jakartaglobe.id/business/pdip-warns-govt-against-overestimating-rupiah-depreciation-in-2025-budge

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