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🇮🇩 Indonesia /Economy & Trade

Rupiah Strengthens as Indonesia Eyes Budget Efficiency in Nutrition Program

From Republika · () Indonesian

Translated from Indonesian, summarized and contextualized by DistantNews.

At a glance

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  • The Indonesian rupiah strengthened against the US dollar, closing at Rp 17,922 per dollar.
  • This rise is linked to the government considering further budget efficiencies for the 'Free Nutritious Meals' (MBG) program.
  • The rupiah had previously weakened, nearing Rp 18,000 per dollar, but market intervention and fiscal stability considerations are helping to stabilize the currency.

The Indonesian rupiah saw a notable strengthening against the US dollar, closing the trading week at Rp 17,922 per dollar. This recovery is attributed, in part, to the government's ongoing consideration of budget efficiencies within the 'Free Nutritious Meals' (MBG) program, a key government initiative.

The market is responding positively to the government considering further efficiencies and reductions in the flagship MBG program to maintain fiscal stability.

— Ibrahim AssuaibiCurrency and Commodity Observer, explaining the market's reaction to the government's fiscal considerations.

The MBG program, known for its substantial budget allocation, has been a focal point for market attention due to its impact on the state budget deficit. The prospect of further efficiency measures has been positively received by the market. The rupiah had experienced significant weakening earlier, approaching the Rp 18,000 mark, a level not seen since early June.

What the market needs now is a clear anchor of expectations that exchange rate stability remains a top priority, supported by close coordination between monetary and fiscal policy.

— Ibrahim AssuaibiCurrency and Commodity Observer, outlining market expectations for currency stability.

Currency observer Ibrahim Assuaibi noted that the market responded favorably to the government's contemplation of efficiencies and reductions in the flagship MBG program, aimed at maintaining fiscal stability. Concurrently, Bank Indonesia has been actively intervening in the market through spot trading, Domestic Non-Deliverable Forward (DNDF), and government securities (SBN) to curb volatility and prevent further depreciation of the rupiah.

I met with the Head of BGN yesterday. She reported that there will be further savings from the MBG program. I think it will be quite significant, but let the Head of BGN announce it later.

— Purbaya Yudhi SadewaMinister of Finance, confirming plans for further budget efficiencies in the MBG program.

Finance Minister Purbaya Yudhi Sadewa confirmed that the National Nutrition Agency (BGN) is preparing further budget efficiencies for the MBG program. While the exact savings amount has not been disclosed, Purbaya indicated it would be significant. He assured that these efficiency measures would not compromise the nutritional quality of the meals provided, with efforts focused on improving human resources within the agency, potentially including hiring more nutrition experts.

No (it won't change), it remains the same. So, it is ensured that the food remains nutritious. Later, I am not a nutritionist. What is clear is that the human resources are improved. If I'm not mistaken, they will hire more nutritionists there.

— Purbaya Yudhi SadewaMinister of Finance, assuring that the nutritional quality of meals will not be affected by budget efficiencies.
DistantNews Editorial

Originally published by Republika in Indonesian. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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