BI: Rupiah strengthened 1.38 percent thanks to strong inflows of foreign capital

This strengthening was driven by strong inflows of foreign capital in portfolio investment

Jakarta (Armfalcon.com) –

Bank Indonesia (BI) noted that the rupiah exchange rate on April 17, 2023 strengthened by 1.38 percent on a point-to-point (ptp) compared to late March 2023 levels due to strong foreign capital inflows.

“This strengthening was driven by strong inflows of foreign capital in portfolio investment,” BI Governor Perry Warjiyo said in the Announcement of the Results of the BI Board of Governors’ Meeting in Jakarta, Tuesday.

He mentioned the inflow of foreign capital in the form of portfolio investment in the first quarter of 2023 which was recorded net inflows of US$4.7 billion. Foreign capital inflows into portfolio investment continued in April 2023 which until April 14 2023 recorded net inflows worth 1.2 billion US dollars.

The positive developments in foreign capital inflows were in line with the easing impact of global financial market uncertainty, amidst improving domestic economic conditions such as high economic growth, low inflation, and attractive yields on financial assets.

Compared to the level at the end of December 2022, the rupiah exchange rate on April 17 2023 strengthened 5.26 percent (year-to-date/ytd), higher than the appreciation of the Indian rupee by 0.93 percent (ytd), the Thai baht by 0.71 percent (ytd), and the depreciation of the Philippine peso by 0.22 percent.

Going forward, Perry estimates the Garuda exchange rate will continue to strengthen in line with the current account surplus and continued foreign capital inflows influenced by the prospects for high domestic economic growth, low inflation, and attractive yields on domestic financial assets.

The Central Bank will continue to strengthen the rupiah exchange rate stabilization policy to control imported goods inflation (inflation) and mitigating the risk of propagation of global financial market uncertainties against the rupiah exchange rate.

source: www.antaranews.com

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