Rupiah Exchange Rate Drops, BI Governor Hopes Markets Don't Have To Worry

JAKARTA - The rupiah exchange rate is still fluctuating, almost touching IDR 16,000 per United States (US) dollar on Wednesday, May 22.

As for the rupiah exchange rate on Wednesday, May 22, 2024, the rupiah spot exchange rate closed lower by 0.02 percent to the level of IDR 15,995 per US dollar.

Meanwhile, the Jakarta Interbank Spot Dollar Rate (Jisdor) exchange rate of Bank Indonesia (BI) closed up 0.18 percent to a price level of IDR 15,995 per US dollar.

The Governor of Bank Indonesia (BI), Perry Warjiyo, hopes that the market will not have to worry because overall the condition of the rupiah exchange rate will tend to be stable and strengthen this year.

"Don't be surprised, don't be confused Rp. 15,990 thank God, the important thing is to be stable around Rp. 16,000 even to Rp. 15,900 and so on," Perry said at a press conference, Wednesday, May 22.

Perry explained that the rupiah exchange rate as a whole tends to be stable and will strengthen this year.

According to Perry, the stability of the rupiah exchange rate is in line with the four mixes conducted by BI, namely, the management of foreign capital portfolio flows, where currently foreign capital has entered the country, interestingly returns, better prospects for Indonesia's economic growth when compared to emerging markets and BI's commitment to maintaining the stability of the rupiah exchange rate.

He said the rupiah exchange rate until May 21, 2024, had strengthened again by 1.66 percent (point to point), after April 2024 weakened by 2.49 percent (point to point).

"The strengthening of the rupiah exchange rate was driven by the positive impact of the response to the Bank Indonesia monetary policy mix in April 2024," he said at a press conference, Wednesday, May 22.

Perry conveyed that this policy response encourages foreign capital inflows, especially to SBN and SRBI, amounting to 4.2 billion US dollars until May 20, 2024.

With this development, the rupiah exchange rate weakened 3.74 percent from the end of December 2023, better than the weakening of the Philippine Peso, Won Korea, and Baht Thailand by 4.91 percent, 5.52 percent, and 5.99 percent, respectively.

In the future, Perry said that the rupiah exchange rate is predicted to be stable with a tendency to strengthen driven by attractive returns in line with the increase in BI-Rate, declining risk premiums, better economic prospects, and Bank Indonesia's commitment to continue to stabilize the rupiah exchange rate.

In addition, Perry said that Bank Indonesia also continues to optimize all available monetary instruments to stabilize the rupiah exchange rate, including through strengthening the pro-market monetary operation strategy by optimizing SRBI, SVBI, and SUVBI instruments.

"Bank Indonesia strengthens coordination with the Government, banking, and the business world to support the implementation of instruments for the placement of Natural Resources Export Result Foreign Exchange (DHE SDA) in line with Government Regulation Number 36 of 2023," he said.