Rupiah Has Weakened Further And Has Returned To Around IDR 14,000 Per US Dollar

JAKARTA - Today's upiah exchange rate was closed lower again. On Thursday February 27, the rupiah closed 0.61 percent lower at the level of Rp. 14,025 per US dollar.

"The JCI has fallen deeply. Market players have temporarily exited risky assets. Maybe wait for the coronavirus situation to subside," said Head of Research at Monex Investindo Futures, Ariston Tjendra, to VOI, Thursday, February 27.

The Hong Kong dollar and the Korean won are the currencies that accompanied the rupiah weakening against the US dollar today.

On the contrary, a series of other Asian currencies that were able to strengthen against the US dollar. Starting from the Taiwan dollar, Singapore dollar, Thai baht to Japanese yen.

The Malaysian ringgit became the most powerful, strengthening 0.51 percent against the US dollar.

Bank Indonesia (BI) Senior Deputy Governor Destry Damayanti said the sentiment of the corona virus had indeed reversed the financial market situation which was very strong at the beginning of the year. To that end, BI has also strengthened intervention to reduce volatility in the rupiah exchange rate.

“Bank Indonesia is trying to smooth volatility. What we are doing is triple intervention to stabilize the monetary sector, ”said Destry, Wednesday, February 26 yesterday.

First, BI reduces volatility through the Domestic Non-Delivery Forward (DNDF) market. This hedging instrument for foreign investors who intends to enter Indonesia, said Destry, has proven to be effective in maintaining exchange rate stability since it was implemented in 2018.

"DNDF also provides full confidence for investors because it can provide a more real direction to exchange rate expectations," said Destry.

Second, BI intervened in the spot market, although Destry admitted there were not many. According to him, intervention in the spot market is important because there is a close correlation between offshore flows and the spot market.

Finally, BI actively entered the government securities (SBN) market as a buyer. Apart from being a measure for the conversion of financial instruments from BI certificates to government bonds, intervention in the domestic bond market is expected to be effective in maintaining the stability of the rupiah exchange rate.

"We know that the bond market relationship with the rupiah is very close. By entering the bond market, we help stabilize the financial sector, especially the rupiah. It is proven that the SBN yield is relatively stable at around 6.5 percent because investors see the government's credibility, ”said Destry as quoted by kontan.co.id.