ID :
27896
Sat, 11/01/2008 - 07:41
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Shortlink :
http://m.oananews.org//node/27896
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TRADE BALANCE REMAINS SECURE DESPITE SHRINKING TRADE SURPLUS
Jakarta, Oct 31 (ANTARA) - Indonesia's balance of trade will remain secure despite possible shrinking of trade surplus as a result of the slowing down of the US and other countries economies, a senior official said.
Macro Planning Director of the National Development Planning Board (Bappenas), Bambang Prijambodo, said here on Friday that foreign direct and portfolio investments in the country were still able to compensate the declining exports due to the world economic meltdown.
"But because our economic growth will also slow down, our need for imports will decline as well. So, we have to observe the prices of our commodities as our exports mostly comprise raw materials. We will see the price of which would decline faster, whether it will be our imports (because of economic slowdown) or our exports (because of commodity price falls)," he added.
He said that if the balance of capital was taken into account, the government would need to maintain business confidence in the country, particularly that of investors, so that they would feel safe and secure in making investment in Indonesia, including in holding the rupiah currency.
In its efforts to maintain the current accounts, he added, the government has made the right decision of tightly controlling foreign exchange reserves of state-owned enterprises (BUMN), while trying to maintain trade surplus.
"The important thing the government has to do is to withstand the fluctuating rupiah, otherwise it would affect the current account performance as a whole," Prijambodo said.
Asked on the impact of the shrinking trade surplus due to the declining foreign exchange reserves, Prijambodo said the government still had the "Bilateral Swap Arrangement" option with China, Japan, and South Korea with a total value of Rp12 billion.
He said however that the loans were virtually expected not be disbursed if possible. "After all, our trade balance is still a surplus, so that foreign exchange reserves are still flowing in," he added.
In the meantime, he said, the US dollar is expected to weaken soon, owing to the fact that its present appreciation would not reflect the US ailing economy.
Macro Planning Director of the National Development Planning Board (Bappenas), Bambang Prijambodo, said here on Friday that foreign direct and portfolio investments in the country were still able to compensate the declining exports due to the world economic meltdown.
"But because our economic growth will also slow down, our need for imports will decline as well. So, we have to observe the prices of our commodities as our exports mostly comprise raw materials. We will see the price of which would decline faster, whether it will be our imports (because of economic slowdown) or our exports (because of commodity price falls)," he added.
He said that if the balance of capital was taken into account, the government would need to maintain business confidence in the country, particularly that of investors, so that they would feel safe and secure in making investment in Indonesia, including in holding the rupiah currency.
In its efforts to maintain the current accounts, he added, the government has made the right decision of tightly controlling foreign exchange reserves of state-owned enterprises (BUMN), while trying to maintain trade surplus.
"The important thing the government has to do is to withstand the fluctuating rupiah, otherwise it would affect the current account performance as a whole," Prijambodo said.
Asked on the impact of the shrinking trade surplus due to the declining foreign exchange reserves, Prijambodo said the government still had the "Bilateral Swap Arrangement" option with China, Japan, and South Korea with a total value of Rp12 billion.
He said however that the loans were virtually expected not be disbursed if possible. "After all, our trade balance is still a surplus, so that foreign exchange reserves are still flowing in," he added.
In the meantime, he said, the US dollar is expected to weaken soon, owing to the fact that its present appreciation would not reflect the US ailing economy.
