JAKARTA, May 18 (Reuters) - Indonesia’s government expects the rupiah to trade at 13,700-14,000 a dollar on average next year, taking into account higher interest rates in the United States, according to a preliminary budget document submitted by the finance ministry to parliament on Friday.
The rupiah has slid to its weakest in more than two years in recent weeks as global investors pull funds from emerging markets. It hit 14,135 a dollar, the weakest since October 2015, on Friday, much weaker than the government’s assumption for a 2018 average of 13,400.
The ministry said the forecast reflected four U.S. interest rate hikes in 2018 and a hawkish stance in 2019 by the Federal Reserve, as well as less portfolio flows into emerging markets in the next two years.
The government also expects Indonesian crude oil prices to average $60-$70 per barrel next year.
Reporting by Tabita Diela; Writing by Gayatri Suroyo; Editing by Kim Coghill