The Market Responds Positively, BI Appreciate the Government’s Economic Policy Package

Senior Deputy Governor of BI, Mirza Adityaswara

Bank Indonesia appreciates the Economic Policy Package has been launched in three stages, namely the Policy Package for Phase I, II, and III. “We greatly appreciate the government’s commitment to continue reforms in structural reform, and we also look at the second policy package that to increase the supply of currency in the spot market and the supply of currency in the forward market, this also has a positive impact to the expectations of people to start selling dollars that perhaps they speculate accumulated yesterday,” said Senior Deputy Governor of Bank Indonesia (BI), Mirza Adityawarman, to reporters at the Presidential office, Jakarta, Wednesday (7/10) evening.

Mirsa explained that the improvement in financial markets situation in recent days, as seen from strengthening of the rupiah against the US dollar, is a combination from external factors and domestic factors.

The external factors, Mirza explained, is the economic figures of the United States (US), which shows a little bit weaker, particularly in its unemployment figures so that the consensus from the current US interest rate hikes is starting to shift. Who initially feared increase is possible in October or December, now shifted possible in the first quarter even possible in the second quarter.

“Well, this makes financial market reversal from some investors, and also possible some speculators who had bought the dollar earlier, they were to cut loss in the financial markets. This occurs besides in Indonesia also in Malaysia and in other emerging market countries,” Mirza said.

While internal factors, according to the Senior Deputy Governor of BI, of course is a positive response from market to see the government’s commitment to deregulate. He explained that the first package, the second package, the third package, it was greeted positively, which is showing that we are serious about structural reform.

Mirza also pointed to the market positive response on the government’s economic  policy package, besides the foreign exchange market of rupiah, which rose significantly three days, that state bond market also welcomed very positively.

Mirza also pointed to the market positive response on the government’s economic policy package, besides the appreciation of rupiah quite significantly in the foreign exchange market during this three days, that government bond market also welcomed very positively.

 “Government bond yields that its rate had climbed to nearly 10 percent per day, or approximately 8.4 percent. It means that if the rate was down, the government financing cost to finance the state budget also means decreased, its certainly improved,” he concluded. (EN/RAH/ES)/Sy.