Whether the prediction is right or wrong, it is 2020 to decide. (Image via Kompas.com)

Rupiah to strengthen at Rp13,900 in 2020: BI

JAKARTA - A trace of optimism came from Bank Indonesia (BI). Everyone hopes that Indonesian Rupiah (IDR) will come back strong once more to Rp13,000-ish against U.S Dollar (USD). BI Senior Deputy Governor, Destry Damayanti, forecasted the good fortune for IDR in 2020, Wednesday (28/8).

For 2020, BI predicted that the forex rate of Indonesian Rupiah (IDR) against U.S Dollar (USD) would be Rp13,900 per USD.

This strengthening will be affected by several factors. However, three main factors will play an important role in bolstering the IDR.

First, the growth of the national economy. This growth will come from investment and household consumption. Damayanti pointed out that these two key supports would hoist IDR’s rate against USD to as much as 5.5%.

“The increase in domestic demand was affected by household consumption and stable investment. This will support our economic growth,” explained Damayanti.

The second factor is inflation. BI promised to maintain the inflation rate to as low as 1% - 3%. BI said that the low inflation rate was because of good expectations as BI’s policies are keeping price stability, managed aggregate demand, and the effect of minimum global price.

Last but not least, the strengthening of IDR will be supported by high forex reserves. BI tabulated that by the end of July 2019, Indonesia had pocketed US$125.9 billion. For several months, the forex reserves saw increases from transactions in the oil & gas sector to the withdrawal of the sovereign paper.

Source: https://www.cnnindonesia.com/ekonomi/20190828184610-78-425485/bi-ramal-rupiah-menguat-ke-rp13900-per-dolar-as-pada-2020