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The central bank had prepared several steps to be taken to reduce CAD swelling. (Credit : CNBC)
CAD is increasingly swollen, BI : we will encourage exports
The current account deficit (CAD) is currently experiencing a swelling and deficit. In second quarter of 2019, CAD was recorded at US $ 8.44 billion, equivalent to 3.04% of Gross Domestic Product (GDP). This time the CAD is deeper than the second quarter of 2018 which was only US $ 7.9 billion or 3.01% of GDP.This swelling made Bank Indonesia (BI) have to think hard to deflate it. BI Senior Deputy Governor, Destry Damayanti, said that the central bank had prepared several steps to be taken to reduce CAD swelling. One way is to encourage exports. But that will only be done if the exchange rate is not fluctuating, it will be good for Indonesian exporters.
Because according to her, the functions and duties of BI must maintain stability of Indonesian exchange rate and maintain supply. The liquidity of dollar is on market, because if Indonesia wants to encourage exports and reduce imports, one thing that is crucial is stability of the exchange rate.
The central bank also urged exporters to jointly bring foreign exchange to Indonesia. The foreign exchange will later be used for development, including for import financing itself.
These steps are planned to be projected until the end of this year. Destry said, it would continue to work to suppress CAD. CAD is planned to be in the range of 2.5% -3% of GDP.
Source: https://www.cnbcindonesia.com/market/20190811130550-17-91170/cad-membengkak-begini-siasat-bi-untuk-mengempiskannya
