Perry Warjiyo0:00
As already conveyed by the Minister of Finance and the Minister of National Development Planning, if I may, I will go directly to slide number 6, which is about a number of views on macroeconomic assumptions, especially regarding economic growth, inflation, and the exchange rate. Regarding economic growth, we also believe, in line with the government's view, that 2027 will be much better than 2026. Our range is 5.1 to 5.9, but we are confident it will be closer to the upper bound. As I have said, first is how sectoral transformation policies, especially for downstreaming programs and natural resource industrialization, including the establishment of PT TSI and PPDHE, will drive higher economic growth. Second, very strong domestic demand. Thank you to the Minister of Finance for also providing many stimuli to boost the people's economy, including free nutritious meals, village cooperatives, and others. Third, close synergy with Bank Indonesia. We will continue, as directed by the Chairman, to support economic growth from the side of Bank Indonesia's policies, especially macroprudential and payment systems for MSMEs and others, which we will explain in more detail later. Bank Indonesia supports growth.
Second, regarding the exchange rate, we also view that in 2027 the exchange rate will strengthen. The rupiah 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, strengthening towards that. First, of course, economic conditions will not be as bad as this year; they will improve. Global economic growth will rise to 3.1%. Of course, these are conditions where geopolitically we hope things will improve, and hopefully it will encourage inflows to emerging markets, 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, low current account deficit, attractive yields, and more than adequate foreign exchange reserves. So our fundamentals will support exchange rate strengthening. Third, this is new: the President's policy for single-export gate through PT Danantara Sumber Daya Indonesia. Because this will increase exports, increase foreign exchange earnings from exports, and increase state revenues, thus supporting not only financing for economic growth but also increasing foreign exchange reserves and strengthening the rupiah exchange rate. Fourth is Bank Indonesia's strong commitment to continue maintaining the rupiah exchange rate through intervention and various other policies that I will explain shortly. Fifth is close coordination of fiscal and monetary policies, between the government's fiscal policy and Bank Indonesia's monetary policy. We have been closely coordinating over time. Most recently, we are jointly focused on maintaining rupiah exchange rate stability, as we announced together on how fiscal and monetary policies are working together to stabilize the rupiah exchange rate, namely by increasing the attractiveness of foreign portfolio investment returns and maintaining adequate liquidity, as we conveyed yesterday. That is regarding the exchange rate. From those five factors, God willing, the rupiah next year will strengthen, 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 the synergy between the government and Bank Indonesia, central and regional, for the inflation control team. We continue to mobilize our 46 offices together with the government to maintain price stability. So those are our views on macroeconomic assumptions related to growth, exchange rate, and inflation. Optimistic that this year is better, and next year, God willing, will be even better. Therefore, synergy is important. On the next slide, we will explain the seven steps of Bank Indonesia in 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. First, we continue to intervene in the market, both in the domestic market and abroad, through cash or forward domestic non-delivery forwards, domestically and abroad. We maintain foreign exchange reserves more than adequately to maintain rupiah exchange rate stability. Second, adjusting interest rates. Today we raised it again to 5.5. We don't like raising interest rates, but to attract foreign portfolio investment that is currently abroad, interest rates are rising everywhere. So it's an adjustment according to market mechanisms. Third, also increasing foreign capital inflows through SRBI, which we continue to coordinate with the government so that portfolio investment in SRBI, government bonds, and stocks increases. Fourth, we also coordinate fiscal and monetary policies to maintain liquidity in the money market and banking sector more than adequately, with primary money growth always in double digits. Most recently it was 14.8%, and in the coming months we will always maintain it in double digits. Fifth, lowering the limit on dollar purchases in the market without underlying, effective from June, to 25,000 per entity per month. Sixth, as I conveyed to the Chairman, 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 and investment settlement between rupiah and China, which we call local currency transactions. Seventh, we also deploy supervision to banks and corporations, coordinating with the Financial Services Authority to ensure that foreign exchange transactions in banks have an underlying. So that is the monetary focus for pro-stability.
The Chairman mentioned Bank Indonesia's support for growth. We use the next slide on macroprudential and payment system policies that are pro-growth, driving growth. First, we purchase government bonds both in the primary and secondary markets, which this year amounts to 152 trillion rupiah, and that is of course part of our support for the Minister of Finance for development financing, as the Minister of Finance conveyed various budget allocations that will be discussed in the Budget Committee next year. Second, we also provide liquidity incentives for banks that channel credit to priority sectors supporting Asta Cita. As of May 1, 2026, we have disbursed, adding liquidity incentives to those banks, 424.7 trillion rupiah. Credit to sectors supporting Asta Cita. Details of the banks are there, state-owned banks 214.2 trillion, and so on. Third, easing all macroprudential policy instruments, whether down payment or macroprudential intermediation ratio, and also synergizing with the Ministry of Finance, Financial Services Authority, business sector, and banking, is the program to accelerate banking intermediation at the central and regional levels. Fourth, accelerating digitalization of the payment system for economic growth for the people, MSMEs, inclusion, and transactions with QRIS, which we continue to improve. QRIS is now used in various countries, including most recently with China, Japan, and South Korea. We ask for prayers so that it can connect to Saudi Arabia for Umrah and Hajj. Fifth, MSME development programs through 46 Bank Indonesia offices, both conventional related to coffee and textiles, and also related to Islamic economics and finance. So, Mr. Chairman, hopefully not exceeding 10 minutes, but the main points are: one, optimistic that this year and next year will be better. Two, Bank Indonesia always synergizes closely with the government, monetary for stability, macroprudential for growth. We ask for your blessings and support.
