Rupiah Weakening? No Need To Panic, Our Depreciation Is Lower Than Malaysia Cs

Illustration (Photo: Doc. Antara)

JAKARTA - Bank Indonesia (BI) stated that the rupiah exchange rate was under pressure in line with the trend experienced by other regional currencies.

BI Governor Perry Warjiyo said that this condition occurred due to the uncertainty of the global financial market which was still high.

In his notes, the exchange rate on July 20, 2022, depreciated 0.60 percent (ptp) compared to the end of June 2022, but with maintained volatility.

"The depreciation is in line with the high uncertainty in global financial markets due to more aggressive monetary policy tightening in various countries", he said during a virtual press conference on Thursday, July 21.

According to Perry, the central bank's move in several countries is believed to be a response to rising inflationary pressures and concerns about a global economic slowdown.

"However, the perception of Indonesia's economic prospects remains positive", he said.

Perry added, that due to this development, the rupiah exchange rate up to July 20, 2022, depreciated 4.90 percent (YTD) compared to the level at the end of 2021.

"The record is relatively better than the depreciation of currencies of several other developing countries, such as Malaysia 6.41 percent, India 7.07 percent, and Thailand 8.88 percent", he said.

Going forward, it is stated that Bank Indonesia will continue to monitor developments in the supply of foreign exchange and strengthen the rupiah exchange rate stabilization policy.

"This is by the operation of market mechanisms and their fundamental values to support efforts to control inflation and macroeconomic stability", Perry concluded.