Minister of Finance Trump Asks The Fed to Return Rp 6,400 T

Jakarta –

United States (US) Treasury Secretary Steven Mnuchin withdrew the emergency loan program to the central bank, Federal Reserve or The Fed.

Launch CNN, Friday (20/11/2020), in a letter sent Thursday to Fed Governor Jerome Powell, Mnuchin asked the central bank to return about US $ 455 billion in unused funds for the program that ends December 31. The fund is equivalent to IDR 6,460 trillion referring to today’s exchange rate, IDR 14,198.10 / US $.

The decision will force several programs to be scrapped, namely programs intended to help businesses struggling because of the pandemic wreaking havoc on the US economy. He said Congress could use the money for other purposes.

The central bank immediately criticized the decision. Powell said that it was too early to stop the loan program.

“When the right time comes, and in my opinion it is not yet or very soon, we will get rid of these tools,” he told an event.

The move has also put the Trump administration at odds with Corporate America. The US Chamber of Commerce condemned the decision at a time when they needed it most.

It also worries investors. Many of them hope that the government will provide more stimulus to help protect the fragile economic recovery as the number of Corona virus cases soars.

In a statement, US Chamber of Commerce Executive Vice President and Chief Policy Officer Neil Bradley said that businesses need the government’s full support by providing the resources needed for the economic recovery.

However, Minister Mnuchin’s move received support among political allies. Republican Senator Mike Crapo, chairman of the US Senate Committee on Banking praised the decision.

“(Returning unused money) allows the funds to be reused for other purposes, such as reducing our national debt, or providing additional targeted assistance to sectors of the economy most in need,” Crapo said in a statement.

Jaret Seiberg, an analyst at Cowen, said Mnuchin’s decision appeared political.

“This appears to be a political move by the Trump Team to limit what President-elect Joe Biden can do next year to boost the economy, especially if Congress fails to provide major stimulus,” he wrote in a research note.

(toy/eds)

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