RI Debt Soaring, Rupiah Closed This Afternoon Slightly Weakening

JAKARTA, KOMPAS.com – Rupiah exchange rate against the US dollar at the close of trading on the spot market slightly weakened on Monday (19/10/2020).

Citing Bloomberg data, the rupiah closed down 10 points (0.07 percent) this afternoon at the level of Rp. 14,708 per US dollar, compared to the previous close of Rp. 14,698 per US dollar.

Director of PT.TRFX Garuda Berjangka Ibrahim said that the rupiah depreciation was due to the negative response to the debt rating submitted by the World Bank some time ago due to the flushing of stimulus due to the Covid-19 pandemic.

Also read: Indonesia’s Foreign Debt Surges in 2 Jokowi Periods

The increase in debt did not happen to Indonesia alone, but many other countries also experienced the same thing. The increase in the amount of debt will inevitably occur due to the high need for fiscal stimulus to support the economic downturn, aka countercyclical.

“As a result of this condition, it is estimated that Indonesia’s debt ratio will reach 38.5 percent of Gross Domestic Product (GDP) in 2020 and reach 41.8 percent of GDP in 2021. The number has increased compared to 2019 which is still 30.5 percent of GDP,” he said. Ibrahim.

However, this debt ratio is still lower than other countries in the world. In Southeast Asia, for example, the Philippines’ debt ratio of 37 percent is estimated to increase to 48.9 percent of GDP this year.

On the other hand, Europe must immediately distribute a 750 billion euro recovery fund for an economy hit by a contested pandemic.

Meanwhile, the release of China’s Gross Domestic Product (GDP) data increased by 4.9 percent in the third quarter of 2020 compared to the same period last year. The growth was lower than economists forecast, but higher than the second quarter with a growth of 3.2 percent.

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