medcom.id, Jakarta: Bank Indonesia (BI) Governor Agus Martowardojo mentioned that the United States (US) Federal Reserve's plan to raise its benchmark rate surely will affect Indonesia.
"It will affect global monetary system including developing countries such as Indonesia," mentioned Agus at his office, Jakarta, Monday (5/30/2016).
Agus lamented the US Federal Reserve's inconsistency. The US Federal Reserve officials signaled it will raise its benchmark rate in June after stating the opposite for months.
"Indonesia will feel the effect especially on its current account deficit," he continued.
He explained most developing countries fund their current account deficits with foreign funds. "It can affect Indonesia's monetary system. So we continue to monitor that," he elaborated.
Agus claimed Indonesia's economy is stronger now compared with the last time the US Federal Reserve raised its benchmark rate last December. It is reflected by the inflation rate which is maintained at around four percent
"We also observe the current account, although it is still in deficit, but it is improving. We see that the government is committed to conduct structural reforms, which creates better investment climate in the second semester. So, generally we are better," he concluded.
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