Fluctuation of Rupiah against Foreign Currencies Remains Stable, Says BI

The strong flow of hot money push the exchange rate of the rupiah increasingly powerful.

Jakarta, 25 Jumadil Akhir 1438/24 March 2017 (MINA) – The fluctuation of the rupiah’s exchange rate against foreign currencies remains stable thanks to the country’s strong economic fundamentals, Bank Indonesia (BI) said.

The indicators of the improving national economy can be seen from the declining current account deficit (CAD) and low inflation rate, Antara quoted chief of the BI’s financial market development Nanang Hendarsyah as saying here on Thursday.

“In 2013, our CAD almost reached 4 percent. Now it stands at only 1.75 percent. Likewise the inflation rate will likely fall to a range of 3-5 percent this year compared to 7 percent in 2013,” he said.

In 2017, the inflow of foreign capital to the domestic market particularly the state bond market is quite large. In addition, Indonesias improving exports also have contributed to the stability of the rupiahs exchange rate, he said.

“The strength of supply and demand in the market has run naturally, without being influenced by the regulator. The flow of foreign currency runs more smoothly compared to three to four years ago,” he said.

The rupiahs stable exchange rate is also the result of Bank Indonesia’s intervention in the market particularly when the volatility of the rupiahs exchange rate moved excessively.

“With the central bank staying in the market, the rupiahs exchange rate has become stable on the emerging market scale,” he said.

The rupiah rose 29 points to close at Rp13,300 against the dollar in the Jakarta inter-bank spot market on Thursday evening compared to the previous close of Rp13,329. (T/RS5/RS1)

Mi’raj Islamic News Agency (MINA)