Perry Warjiyo Confident Rupiah Will Strengthen to Rp16,800 by 2027, Reveals Reasons for Economic ...

As has been extensively conveyed by the Minister of Finance and the Minister of Investment. If I may, I will go directly to slide number 6, which concerns a number of macroeconomic assumptions, specifically regarding economic growth, inflation, and the exchange rate. Regarding economic growth, we are confident that it aligns with the government's view that 2027 will be much better than 2026. Our range is 5.1 to 5.6, up to 5.9, but we believe it will be closer to the upper limit. As mentioned earlier, first is how sectoral transformation policies, especially for downstreaming and indigenization programs of natural resources, including the establishment of PTDSI and PPDHE, will all drive higher economic growth. Second is very strong domestic demand. Thank you to the Minister of Finance for the many stimuli to encourage the people's economy, including free nutritious meals, the Red and White Village Cooperatives, and others. Third is close synergy with village banks. We will continue, as directed by the Chairman, to support economic growth from the policy side, especially macroprudential and payment systems for MSMEs and others, which we will explain in more detail later.

Regarding the exchange rate, we also view that in 2027, the rupiah will strengthen. The range is the same as the government's, 16,800 to 17,500. There are five main factors underlying why the rupiah in 2027 will be in the range of 16,800 to 17,500 and strengthen towards that level. First, of course, economic conditions will not be as bad as this year and will improve. Global economic growth will rise to 3.1%. Of course, we hope the current geopolitical conditions will ease, and it is hoped this will drive inflows to emerging market countries, including Indonesia. Second, as the Minister of Finance always says and I always repeat, Indonesia's economic fundamentals are good and will support the strengthening of the rupiah exchange rate. High economic growth, low inflation, a low current account deficit, attractive yields, and foreign exchange reserves that are more than sufficient. So our fundamentals will support the strengthening of the rupiah exchange rate. Third, this is new, is the President's policy for single-door exports regarding PT Dana and Sumber Daya Indonesia. Because this will increase exports, then increase foreign exchange from exports, and increase state revenue, so this will support not only financing for economic growth but also support the increase in foreign exchange, foreign exchange reserves, and the strengthening of the rupiah exchange rate. Fourth is the strong commitment of Bank Indonesia to continue maintaining the rupiah exchange rate, both through intervention and various other policies that I will explain shortly. Fifth is close coordination of fiscal and monetary policies, the government's fiscal policy and Bank Indonesia's monetary policy. Including from time to time, we continue to be close, and recently we are both focused on maintaining rupiah exchange rate stability, which we announced together yesterday on how fiscal and monetary policies are synchronized to maintain rupiah exchange rate stability, namely increasing the attractiveness of investment yields for foreign portfolio investors and also maintaining sufficient liquidity, which we conveyed yesterday. So those five factors mean the rupiah, God willing, will strengthen next year in the range of 16,800 to 17,500.

Inflation is also the same, 2.5% plus or minus 1%, or a range of 1.5% to 3.5%, because of course our good economic conditions and also the synergy between the government and Bank Indonesia, central and regional, for the inflation control team. We mobilize our 46 offices together with the government to maintain price stability. So, those are our views on the macroeconomic assumptions related to growth, exchange rate, and inflation. We are optimistic now, and next year, God willing, it will be better. Therefore, synergy is important. On the next slide, we will explain the seven steps of Bank Indonesia's monetary policy. So, our monetary policy is directed towards stability. Sir, there are seven steps to maintain stability, especially the rupiah exchange rate, which we have conveyed on various occasions. One, we continue to intervene in the market, both in the domestic market and foreign markets, through spot or forward, domestic non-deliverable, within the country and abroad. Our foreign exchange reserves are maintained at more than sufficient levels to maintain rupiah exchange rate stability. Number two is adjusting interest rates. Today we raised it again to 5.5%. We do not like raising interest rates, but to attract foreign portfolio investment that is currently abroad, interest rates are rising everywhere. So the adjustment is in line with market mechanisms. Number three is also increasing foreign capital inflows through SRBI, which we continue to coordinate with the government so that investment in SRBI, government bonds, and stocks increases. Number four, also coordinating fiscal and monetary policy, is maintaining liquidity in the money market and banking sector at more than sufficient levels, meaning money supply growth is always double-digit, the last was 14.8%, and in the coming months, we will always maintain it at double-digit. Number five is lowering the limit for purchasing US dollars in the market without underlying, which applies starting June at 25,000 per actor per month. Number six, as I conveyed earlier, Mr. Chairman, is expanding foreign exchange transactions domestically. Not only rupiah-dollar but also rupiah-yuan. Rupiah-yuan is now transacted domestically with increasing yuan-rupiah transactions for trade settlement and investment between the rupiah and China, which we call local currency transaction. Number seven, we also deploy supervision to banks and corporations in coordination with OJK to ensure that foreign exchange transactions in banking are with underlying. So, that is the focus of monetary policy for pro-stability. Sir, you mentioned earlier BI's support for growth. We use the next slide, which is macroprudential and payment system policies that proactively encourage growth. Number one, we are purchasing government bonds from both the primary and secondary markets, which this year is 12 trillion rupiah. And that is, of course, part of our support for the Minister of Finance for development financing, as mentioned by the Minister of Finance, various budget allocations that will be discussed in this meeting next year. Number two, we are also providing liquidity incentives for banks that channel credit to priority sectors supporting the Asta Cita program. As of May 1, 2026, we have disbursed additional liquidity incentives to those banks of 42.7 trillion in credit to sectors supporting Asta Cita. The details of the banks are there, state-owned banks 214.2 trillion, and so on. Number three is the relaxation of all macroprudential policy instruments, whether down payments or macro intermediation ratios, and also in synergy with the Ministry of Finance, OJK, the business world, and banking, is the program to accelerate banking intermediation at the central and regional levels. Number four is accelerating the digitalization of payment systems for economic growth, for the people, MSMEs, inclusion, and so on. With QRIS and various others, we continue to improve QRIS, which is now used in various countries, including most recently with China, Japan, South Korea, and others, so it can connect to Saudi Arabia for Umrah and Hajj. Number five is MSME development programs through Bank Indonesia's 46 offices, both conventional related to coffee and textiles, as well as related to Islamic economics and finance. So, Mr. Chairman, I hope I did not exceed 10 minutes, but the essence is one, optimistic this year and next year will be better. Two, that Bank Indonesia always has close synergy with the government. Monetary policy is for stability, macroprudential for growth. We ask for your prayers and support. Thank you. May Allah Subhanahu wa Taala bless us all. Wassalamualaikum warahmatullahi wabarakatuh.