Indonesia’s government proposed to parliament on Friday a slightly stronger assumption for its rupiah currency and a lower 10-year bond yield in 2024, its finance minister said.
The government sees the rupiah trading within a range of 14,700 to 15,300 per dollar and 10-year bond yields averaging between 6.49 percent to 6.91 percent next year, Sri Mulyani Indrawati said.
The minister said the adjustments were made amid the country’s positive trade performance, which has been in surplus since mid-2020, and an ongoing capital inflow.
“Those [factors] create foundational support for the rupiah to remain stable,” she said in a press conference on Friday.
The rupiah has emerged as Asia’s best-performing currency, firming around 4 percent against the U.S. dollar so far this year.
Sri Mulyani previously said in April the rupiah is expected to trade within a range of 14,800 to 15,400 per dollar in 2024, while the average 10-year bond yield was expected to range between 6.5 percent to 7.4 percent.
She added the government also adjusted 2024 assumptions for oil and gas lifting to a range of 597,000-652,000 barrels per day and 999,000-1.054 million barrels of oil equivalent per day respectively.
The government assumed crude oil prices in a range of $75 to $85 a barrel next year, Sri Mulyani said.
Despite the changes in assumptions, the government will aim to keep its budget deficit in a range of 2.16 percent to 2.64 percent of gross domestic product (GDP), below 2023’s target of 2.84 percent of GDP, she said.
In 2024, Sri Mulyani said government spending will be directed towards, among others, completing remaining key state projects, including the construction of the new capital, and holding parliamentary and presidential elections in February.
President Joko Widodo is expected to give parliament a more detailed 2024 budget proposal in August and lawmakers are expected to vote to approve it a few months thereafter.