BI Governor Says Rupiah Can Strengthen At IDR 15,800

JAKARTA - The rupiah exchange rate against the United States (US) dollar has been observed to strengthen in the last two days.

Today, the rupiah exchange rate closed higher at IDR 16,083 per US dollar.

Governor of Bank Indonesia (BI) Perry Warjiyo projects that the strengthening of the rupiah exchange rate against the US dollar will continue. In fact, it is estimated that it will be until the end of 2024.

"We believe from BI that the strengthening of the rupiah exchange rate will continue from now on to the end of the year. It can be seen if we look at data on non-delivery forward markets abroad, as well as domestic non-divery forwards in the country," he said at a press conference on the results of the KSSK meeting, reported by the Ministry of Finance's YouTube, Friday, May 3.

In the next month, continued Perry, the rupiah will strengthen towards Rp. 16,000 per US dollar. In fact, it can go down again below Rp. 16,000.

"If Bank Indonesia believes that the rupiah exchange rate will strengthen to Rp. 16,000 and then Rp. 15,800," he explained.

Furthermore, Perry said that there are four main factors that are the reason the rupiah continues to strengthen recently. First, the increase in the benchmark interest rate or BI Rate by 25 basis points (bps) to 6.25 percent.

"With the increase in the BI Rate interest rate as well as SRBI, the attractiveness of the portfolio investment returns in Indonesia is again attractive. With this increase, if we appeal it to India, yields are fermented or yield differences are better than India," he said.

Second, Perry said, foreign capital has started entering Indonesia through the Rupiah Bank Indonesia Securities (SRBI). He said that in the fourth week of April, the incoming SRBI amounted to Rp4.5 trillion. Growth also continued until the first three days of May 2024.

"The first three days, until yesterday's data, SRBI has continued to inflow in the amount of Rp1.58 trillion. In fact, the SBRI, which was originally outflow, has returned to inflow in the first week of May, a total of Rp3.75 trillion," he explained.

Third, continued Perry, the rupiah exchange rate will strengthen as Indonesia's economic growth continues to strengthen. He said Indonesia's economy is predicted to grow above 5 percent.

Earlier, the Minister of Finance said, economic growth was above 5 percent, then inflation was low, in the 2.5 plus minus 1 percent range. Those are also good prospects, and of course the economic prospects are the attraction of inflow, "he explained.

Finally, Perry said, Bank Indonesia also continues to be committed to maintaining the rupiah exchange rate. He said this through coordination with the government and KSSK.

"We believe that the stabilization of the rupiah will continue to strengthen in the future, influenced by these four factors," he said.