My direction to BUMN is to optimize buying dollars, not buying

JAKARTA – The inflation rate in the United States (US) is difficult to reduce, one of which is triggered by rising energy prices. Apart from that, the current war situation has made global energy prices even stronger. As a result, Central Banks around the world will respond by postponing the possibility of cutting their benchmark interest rates.

The Central Bank’s attitude resulted in capital outflows from developing countries and increased bond yields, increased funding market interest rates and ultimately credit. Currently the yield on state bonds is at the level of 6.98 percent.

Minister of State-Owned Enterprises (BUMN) Erick Thohir asked state-owned companies to take anticipatory steps towards the global dynamics which are currently increasingly heated. BUMNs that are affected by imported raw materials and BUMNs with a large portion of foreign debt (in USD) are also asked to purchase USD appropriately, wisely and according to priorities to meet their needs. The companies in question include PT Pertamina (Persero), PT PLN (Persero), Pharmaceutical BUMN Holding, and MIND ID.

“My direction to BUMN is to optimize dollar purchases, meaning it is measured and according to needs, not buying up. The point is not to overdo it, we must be wise in responding to the current increase in the USD,” said Erick to journalists, Friday (19/4/ 2024).

Erick’s request is considered to be in line with Coordinating Minister for Economic Affairs Airlangga Hartarto and Deputy Minister of Finance Suahasil Nazara in anticipating the continued impact of global geopolitical and economic turmoil.

Where, the government already has an instrument in the form of foreign exchange from exports which it wants to place domestically, apart from that the government wants consumer imports to be restrained first in the current situation. “For this reason, controlling BUMN spending and imports must be prioritized and in accordance with the most urgent needs,” explained Erick.

Also read: Erick Thohir’s subordinates deny there was an order for BUMN to buy US dollars

Primarily, BUMN has import exposure and debt denominated in USD. He also reminded BUMN Directors to be more careful and not to buy USD excessively and accumulate.

(nng)