Analysts Call Rupiah Stability Maintained Supported By BI Pro Market Instruments

Bank Mandiri money market analyst Reny Eka Putri said the stability of the rupiah exchange rate against the US dollar was maintained, supported by the existence of the latest pro-market instrument from Bank Indonesia (BI).

"The stability of the rupiah is also still maintained by Bank Indonesia's policies, including the launch of the latest pro-market instrument and aimed at deepening the money market," Reny said as quoted by ANTARA, Monday, November 27.

The latest instruments that are interesting for the market are foreign exchange securities from Bank Indonesia (SVBI) and Sukuk Valuta, a foreigner from Bank Indonesia (SUVBI). I

The instrument is aimed at attracting foreign funds into the domestic financial market amid rising global risks.

In its inaugural publication, SVBI managed to raise USD 236.5 million in funds with an incoming bid of USD 266.5 million, above the Bank Indonesia target of USD 200 million.

This indicates that this instrument is quite in demand by the market.

BI also previously issued the Bank Indonesia Securities Instrument (SRBI) to attract foreign funds into the domestic market.

The market response was quite good with foreign ownership of 10.8 percent as of October 2023.

Furthermore, the SRBI auction reached IDR 168.81 trillion as of November 21, 2023.

On the other hand, rupiah fluctuations are also influenced by the Fed which indicates that it will still increase the Fed Funds Rate (FFR) towards the end of 2023.

Inflation of the United States (US) risks having difficulty getting down to the target in the near future so the policy of raising interest rates is still needed. Moreover, currently, US core inflation is still at the level of 4 percent as of October 2023.

At the close of trading today, the rupiah currency increased 71 points or 0.46 percent to Rp15,494 per US dollar from the previous closing of Rp15,565 per US dollar.

Meanwhile, the Jakarta Interbank Spot Dollar Rate (JISDOR) on Monday rose to IDR 15,527 per US dollar from the previous IDR 15,587 per US dollar.

Previously, the Executive Director of the BI Communication Department Erwin Haryono said the SVBI and SUVBI instruments were in line with the market (market) mechanism to support the deepening of the money market in foreign currencies to support the effectiveness of monetary policy, financial system stability, and economic financing synergy.

The mechanisms of the two instruments are regulated in Bank Indonesia Regulation Number 13 concerning the Second Amendment to Bank Indonesia Regulation Number 22/14/PBI/2020 concerning Monetary Operations. This provision is effective on November 16, 2023.