Mighty Rupiah Exchange Rate Against US Dollar, This Is The BI Boss

Illustrated (Irfan Meidianto / VOI)

JAKARTA - The rupiah exchange rate at the end of this week, Friday, June 5, was closed strong. The Garuda spot currency closed at Rp 13,878 per US dollar (US) or continued to rise. Surely this is the best level since last February 24.

Responding to this, the Governor of Bank Indonesia (BI) Perry Warjiyo was grateful. This is because the rupiah exchange rate, which was sluggish, has recently shown its strength again.

"This is a blessing from Allah SWT for all of us. The rupiah has reached below Rp. 14,000 per US dollar," Perry was quoted as saying on Saturday, June 6.

He said, the strengthening of the rupiah exchange rate was in accordance with BI's perspective. Whereas BI views the rupiah exchange rate is still undervalued, so that in the future there is still potential to strengthen.

This, he continued, was because in May inflation was low or based on data from the Central Statistics Agency (BPS) at the level of 0.07, then a low current account deficit. In addition, differences in benchmark interest rates outside or within the country attract investors.

"This shows that the yield on SBN financial assets is still high," Perry said.

Not only that, the strengthening of the rupiah was also supported by the decline in the credit default swap (CDS) indicator from 245 to 126. Even if it was compared to before COVID-19, the CDS level was still high.

"Before Covid-19 it was at the level of 66-68. God willing, the risk premium after Covid-19 will be lower than 126 and support the strengthening of the exchange rate," said Perry.