BI: Rupiah strengthened 0.63 percent due to stabilization policy

The rupiah exchange rate strengthened in line with the stabilization policy pursued by Bank Indonesia

Jakarta ( – Bank Indonesia (BI) reported that the rupiah exchange rate appreciated 0.63 percent point to point (ptp) as of May 24 2023, when compared to the end of quarter I-2023 due to the support of the stabilization policy.

“The rupiah exchange rate has strengthened in line with the stabilization policy pursued by Bank Indonesia,” said Bank Indonesia Governor Perry Warjiyo during the announcement of the results of the May 2023 RDG in Jakarta, Thursday.

In addition, the strengthening of the rupiah exchange rate was also driven by strong inflows of foreign capital in portfolio investment.

Perry explained that inflows of foreign capital on the domestic financial market were reflected in portfolio investments which were recorded as of May 23, 2023 net inflows 1.0 billion United States (US) dollars.

Meanwhile, when compared to the level in December 2022, the rupiah exchange rate strengthened 4.48 percent year-to-date (ytd). The strengthening of the rupiah exchange rate was better when compared to the appreciation of the Thai baht by 0.20 percent (ytd) and the Indian rupee by 0.08 percent (ytd). In fact, the Philippines reported a currency exchange rate depreciation of 0.10 percent (ytd).

BI estimates that the appreciation of the rupiah will continue going forward, supported by the current account surplus and inflows of foreign capital in line with strong economic growth prospects.

Perry added that low inflation and attractive yields on domestic financial assets are also indicators that support the continued appreciation of the rupiah going forward.

On this occasion, the Governor of BI stated that he would continue to strengthen the rupiah exchange rate stabilization policy through triple intervention And twist operation to control imported goods inflationinflation) and mitigate the risk of spreading uncertainty in global financial markets.

Triple intervention or the three interventions referred to by BI are interventions in the foreign exchange market with transactions spot, Domestic Non-Deliverable Forward (DNDF), as well as the purchase/sale of Government Securities (SBN) in the secondary market.

Temporary twist operation BI will continue selling SBN in the secondary market for short tenors. In this way, it is expected to increase the attractiveness of SBN yields for foreign portfolio investors to be able to strengthen the stability of the rupiah exchange rate.

Also read: Analyst: The weakening of the rupiah on Thursday is still due to the issue of the US debt ceiling
Also read: Analyst predicts the weakening of the rupiah will only be temporary
Also read: Uncertainty about the “debt ceiling” in the US benefits the US dollar

Reporter: Imamatul Silfia
Editor: Faisal Yunianto


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