Rupiah`s Exchange Rate to Strengthen, Central Bank Says

Employee counts piles of rupiah bills at Cash Center, Bank Mandiri, Jakarta, on Thursday (19/7/2018). (ANTARA /Sigid Kurniawan)

Jakarta, MINA — Bank Indonesia (BI) Governor Perry Warjiyo believed the rupiah`s exchange rate against the dollar would be relatively stable and begin to strengthen, after it came under pressure due to global economic turbulence, Antara News reported.

“Looking at the development in the rupiah`s exchange rate today, this week and some time in the future, Alhamdulillah (thank God), the rupiah`s exchange rate will remain stable and begin to strengthen,” he said here on Friday.

He noted that three supporting factors had made the rupiah stable and strengthened it: first, easing risks in the global financial market, particularly those related to the US-China trade war; second, investors` good confidence in the steps taken by the central bank and the government; and third, the increasing number of exporters selling their foreign currencies.

In fact, many global investors including large fund managers believed the trade war did not have a good impact on the US economy and they began to invest in developing countries, he said.

“Once again, the trade war did not have a good impact not only on the global economy, but the US economy as well, so they have begun to allocate the portfolios they once withdrew from emerging markets, to the emerging markets,” he said.

Foreign capital inflow began to enter

In addition, foreign capital flow had also begun to enter Indonesia, albeit in a small amount. Hopefully, there would be more foreign capital inflows during government securities auctions next week, he said.

“Most of them now invest in the secondary market but the amount is not too large,” he said.

He said both domestic and foreign investors` confidence in the policies adopted by the central bank and the government is quite strong.

Both the government and the central bank had communicated with a number of large investors in Singapore, London and New York. They believed in the Indonesian economic fundamentals.

He said the rising number of exporters selling their foreign currency had added to the supply of dollars in the domestic market. T/RS5/RS1)

Mi’raj Islamic News Agency (MINA)