JAKARTA: The Indonesian economy faces tough global challenges with the rupiah exchange rate weakening, says an economic team from publicly listed private lender Bank Danamon.
The team noted three threats against the economy – the outflow of United States dollars from Indonesian market, trade war and the increase of global energy prices.
It projects the ongoing outflow of capital from the Indonesian market owing to the sales of shares and bonds by foreign investors sparked by US economic improvement.
As a result, the Jakarta Composite Index (JCI) declined 2 percent earlier this week and the rupiah exchange rate weakened to above 13,800 against the dollar.
Another tough challenge for the economy was a trade war initiated by President Donald Trump’s decision to impose a tariff of 25 percent on steel imports and 10 percent tariff on aluminum imports.