LPEM FEB UI Economist Says Indonesia Does Not Need to Use the IMF SDR Facility yet
KONTAN.CO.ID – JAKARTA. (4/8/2021) The International Monetary Fund (IMF) endeavored to save the global economy and countries from the negative impact of the Covid-19 pandemic.
The IMF Board of Governors approved an additional general allocation of Special Drawing Rights (SDR) of SDR 456 billion or equivalent to US$ 650 billion to increase global liquidity.
Around SDR 193 billion or the equivalent of US$ 275 billion will later be given to emerging markets, including low-income countries.
LPEM FEB UI Macroeconomics and Financial Markets Economist Teuku Riefky appreciates this gesture. This assistance will help countries, especially developing countries and poor countries to survive in the midst of a pandemic.
Although Indonesia is also a developing country and has an SDR quota at the IMF, Riefky considers that currently Indonesia does not need to use this facility.
“Indonesia’s liquidity is still sufficient. Indonesia’s budget is still available. In fact, our budget is still not absorbed 100%. So, we can still take advantage of what is still in the country.” Riefky said to Kontan.co.id, Wednesday (4/8).
Riefky said, for current fiscal financing, it is better for Indonesia to boost revenues and manage the budget, such as refocusing and reallocating. Instead of adding to the burden of debt.
“This is the entry of bilateral or multilateral debt. Our debt has increased drastically. However, it is still at a safe level, but this is still not necessary,” he said.
Even so, Riefky said that Indonesia could use this as a last resort. If, indeed, the condition is dire enough to warrant the decision. However, he again suggested that Indonesia should better utilize and optimize existing resources.
Source: https://nasional.kontan.co.id/news/ekonom-lpem-feb-ui-sebut-indonesia-belum-perlu-gunakan-cepat-sdr-imf/?utm_source=line&utm_medium=text
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