BI Board of Governor's Meeting, August 2018

Febrio Kacaribu (), Alvin Ulido Lumbanraja () and Syahda Sabrina ()
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Febrio Kacaribu: Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)
Alvin Ulido Lumbanraja: Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)
Syahda Sabrina: Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)

No 201808, LPEM FEBUI BI Board of Governor Meeting Brief from LPEM, Faculty of Economics and Business, University of Indonesia

Abstract: Rupiah's depreciation to Rp14,600 is driven by confluence of external factors, particularly contagion effect from Turkish Lira’s rapid depreciation throughout emerging markets. Additionally, market still take into account risk of reduction of global growth due to trade war between US, China, and EU, and its negative implication on Rupiah’s exchange rate. We see strength of Indonesia’s economic fundamentals and credibility of BI’s promise to defend exchange rate stability prevent Rupiah from experiencing rapid depreciation like other more vulnerable emerging market currencies. Nevertheless, external risks and widening current account deficit makes increase in benchmark rate this Wednesday necessary.

Keywords: gdp; —; economic; —; economic; outlook; —; inflation; —; macroeconomics; —; interest; rate (search for similar items in EconPapers)
Date: 2018-08, Revised 2018-08
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