BUSINESS – The US dollar’s persistent strength has raised concerns globally, with the International Monetary Fund (IMF) shedding light on the underlying causes. According to the IMF, the dollar’s appreciation is primarily driven by the Federal Reserve’s aggressive interest rate hikes aimed at curbing inflation, coupled with geopolitical tensions such as the Russia-Ukraine conflict. These factors have led to a surge in demand for the dollar as a safe-haven asset, impacting emerging markets significantly.
Gita Gopinath, the IMF’s First Deputy Managing Director, stated, “The strengthening of the US dollar is a reflection of the global economic uncertainties and the Federal Reserve’s monetary policy stance. This has implications for emerging markets, which are experiencing capital outflows and currency depreciations.”
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In Indonesia, the rupiah has felt the pressure, depreciating to levels around Rp16,000 per US dollar. Bank Indonesia Governor Perry Warjiyo acknowledged the global trend, noting that while all currencies are under pressure, the rupiah’s depreciation is relatively moderate compared to others.
He emphasized the importance of maintaining economic stability through coordinated fiscal and monetary policies. Finance Minister Sri Mulyani Indrawati highlighted the role of the state budget (APBN) as a shock absorber to mitigate external pressures. She emphasized the need for continued vigilance and proactive measures to safeguard the economy against global headwinds.
The IMF’s analysis underscores the interconnectedness of global economies and the ripple effects of major policy decisions in advanced economies. As the US dollar continues to exert its influence, emerging markets like Indonesia must navigate these challenges through prudent economic management and strategic policy interventions.
Source: CNBC Indonesia
