Rupiah Weakens, BI Reveals Impact Of Transfer Of Portfolio Investor Allocation To US

Rupiah and US Dollars (Photo: dock. Antara)

JAKARTA - Bank Indonesia (BI) Rupiah's exchange rate until November 19, 2024 weakened by 0.84 percent (ptp) from the previous month.

Bank Indonesia Governor Perry Warjiyo said that the weakening of the exchange rate was due to the widespread strengthening of the US dollar currency, as well as the reversing preference of global investors by moving their portfolio allocation back to the US after the general election results in the US.

"In general, the weakening of the Rupiah exchange rate remains under control, when compared to the level at the end of December 2023, there was a depreciation of 2.74 percent, smaller than the weakening of the Taiwan Dollar, Philippine Peso, and Korean Won, which were each depreciated at 5.26 percent, 5.83 percent, and 7.53 percent," he said at a press conference, Wednesday, November 20.

In the future, Perry said that the Rupiah exchange rate is predicted to be stable, supported by Bank Indonesia's commitment to maintain the stability of the Rupiah exchange rate, attractive returns, low inflation, and a good prospect of Indonesia's economic growth.

In addition, Perry said that all monetary instruments will continue to be optimized, including strengthening the pro-market monetary operations strategy by optimizing the Rupiah Bank Indonesia Securities (SRBI) instrument, Bank Indonesia Valas Securities (SVBI), and Bank Indonesia Valas Sukuk (SUVBI) to strengthen policy effectiveness in attracting foreign portfolio investments and supporting strengthening the Rupiah exchange rate.

Therefore, Perry said that the Bank Indonesia exchange rate policy was continuously directed to maintain the stability of the upiah from the impact of the large US dollar strengthening.

Meanwhile, Perry said that the increasing uncertainty of global financial markets prompted the capital flow of portfolio investments until November 18, 2024, which recorded net outflows of US$1.9 billion, after in October 2024 net inflows of US$1.1 billion.

"The position of Indonesia's foreign exchange reserves at the end of October 2024 was recorded at 151.2 billion US dollars, equivalent to financing 6.6 months of imports or 6.4 months of imports and payment of government foreign debt, and was above the international adequacy standard of about 3 months of imports," he explained.