Indonesia’s economy is much stronger than during the 1997 Asian financial crisis and the currency’s weakness is a source of strength, the World Bank said.
“With a flexible exchange rate now, moderate devaluation makes imports more expensive, exports cheaper, and the dollar value of profit transfers lower,” Rodrigo Chaves, the bank’s country director for Indonesia and Timor-Leste, said in a statement on Wednesday. “These elements reduce the current-account deficit automatically.”
