We fear that the much talked about LNG
Windfall will not be realized.
A world Banks report states that fourth fifths of the LNG is foreign own. Two thirds of the cost project cost is financed through International debt. LNG windfall will first be used to service the loans before being put into SWF.
We don’t know the reason behind BPNG's delay in foreign exchange intervention as someone stated in Facebook somewhere but we are sure for the fact that intervention now is crucial.
Intervention in foreign exchange will smooth the exchange rates and help
manage inflation.
On the other hand, the intervention can undermine the protection, a
floating exchange rate provides from economic shocks. That could be a possible
reason why BPNG is not acting fast.
Kina has been gradually declining against major foreign currencies since
2012. See the graph above from MoniPlus.
No comments:
Post a Comment