Indonesia's Economic Policy: Shifting from Dollar Dependency to Domestic Revitalization
Indonesia's fixation on the rupiah-US dollar exchange rate has made its monetary policy overly responsive to external conditions, forcing domestic activity to absorb shocks. While a return to a formal peg might seem appealing amid rupiah weakness, experts argue Indonesia lacks the necessary reserves and credibility. They advocate for a 'free and active' economic policy, mirroring foreign policy principles, to prioritize domestic inflation and economic conditions over dollar dependency.
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