CarissaPutri.Com: Maintaining The Condition of The State Budget

Government asked to continue to monitor the flow of foreign funds that are hot money (hot money), which can enter and exit at any time. Flows of foreign funds is that often affect the exchange rate and the overall Indonesian economy. Thus the views and expectations expressed observer and businessman, Wednesday (26 / 5), in Jakarta, Indonesia with respect to economic conditions and the possible impact of the financial crisis that was sweeping Europe. Finance Minister Agus Martowardojo previously asserted, the government is ready to face the impact of financial crisis in Greece and Europe.

One formula is to keep the budget under control and healthy, with cash flow availability at any time. “I’m optimistic,” said Agus new on May 20 and sworn in by President Susilo Bambang Yudhoyono to replace Sri Mulyani Indrawati. It is maintaining the condition of the state budget. Anwar Farial money market observers said, to face the impact of financial crisis in Europe, the government is not enough just to control the national budget. Because, the government will not be able to control the budget if they are not able to control the flow of foreign funds that have been so free entry and exit to Indonesia.

The flow of foreign funds that briefly enter and exit a moment, continued Farial, often destabilize the exchange rate. As a result, the government was no longer able to maintain the exchange rate assumption in the budget. If Europe continues to widen the crisis, said Farial, foreign funds that are in Indonesia could have suddenly come out in large enough quantities so that the resulting value of the rupiah collapsed and affect the overall Indonesian economy. In maintaining the condition of the state budget.

Therefore, what is needed is how the government can control hot money in Indonesia by making rules about the flow of foreign funds, both entry-exit period as well as any instrument that can be bought by foreign investors. Farial added that Indonesia needs to learn from neighboring countries that regulate the flow of foreign funds in the country, such as Thailand and Malaysia. “Look at Thailand, as hot as any political conditions there, the value of its currency remained 32-33 baht per U.S. dollar. That’s why maintaining the condition of the state budget is important. Try the situation in Thailand occurred in Indonesia, the rupiah we can immediately turn upside down, “he said.

The rupiah on the trading day Wednesday continued depressed, down 38 points from Rp 9335 per U.S. dollar at the previous close of Rp 9373 per U.S. dollar. Depressed because the market value of the rupiah to speculate with the financial crisis in Greece that there has been no significant solution. Deputy Governor of Bank Indonesia (BI) Budi Mulya acknowledged, the weakening of rupiah exchange rate these days is the impact of the crisis in Greece and Europe. The crisis is making investors shift their assets into U.S. dollars.

However, Budi said, the condition is believed to BI only temporary. Section, Indonesian economic fundamentals remain strong. Mirza Adityaswara economic observers recognize the condition of the financial crisis in Europe is becoming increasingly serious. “Conditions in Greece and Europe must continue to be monitored and the anticipated impact on the Indonesian economy,” said Mirza. Meanwhile, the business world expects the Ministry of Finance, Agus Martowardojo, in addition to maintaining the condition of the state budget, also prioritize policies that encourage investment in labor intensive industries.