Sorry India, Malaysia And Thailand, Rupiah RI Is Still Stronger Even Though It Is Natural To Weaken

Illustration (Photo: Doc. Antara)

JAKARTA - Bank Indonesia (BI) reported that the rupiah exchange rate on September 21, 2022 was depreciated at 1.03 percent point per point (ptp) compared to the end of August 2022.

BI Governor Perry Warjiyo said the development of the exchange rate was relatively maintained supported by domestic foreign exchange supplies and positive perceptions of domestic economic prospects, as well as central bank stabilization measures.

According to him, the rupiah exchange rate until September 21, 2022 was depreciated 4.97 percent year to date (ytd) compared to the final level of 2021.

"This record is relatively better than the depreciation of a number of other developing countries, such as India at 7.05 percent, Malaysia at 8.51 percent and Thailand at 10.07 percent," he said after holding the Board of Governors' Meeting (RDG) quoted on Sunday, September 25.

Perry added that Bank Indonesia will continue to strengthen the policy of stabilizing the exchange rate in accordance with its fundamental value to support efforts to control inflation and macroeconomic stability.

"In general, we can say that the stability of the rupiah exchange rate is maintained amid increasing uncertainty in global financial markets," he said.

On the other hand, Perry emphasized that the performance of the Indonesia Payment Balance (NPI) is expected to improve in line with strong export performance.

He said that the current transaction in the third quarter of 2022 is expected to remain strong, supported by increased export performance in line with the strong demand from several key trading partners, government policy support to encourage exports, and still high global commodity prices.

Meanwhile, pressure from the foreign capital flow side, especially in the form of portfolio investment, is still occurring amid the increasing uncertainty of global financial markets.

In the third quarter of 2022 (up to September 20, 2022), portfolio investment recorded a net outflow of 600 million US dollars. Meanwhile, the position of foreign exchange reserves at the end of August 2022 was recorded at 132.2 billion US dollars and was above the international adequacy standard of about 3 months of imports.

"In the future, NPI's performance in 2022 is predicted to be maintained with current transactions that have the potential to be better than the original forecast, especially supported by global commodity prices that are still at high levels," he said.

"This is also supported by the balance of capital and financial transactions, especially in the form of Foreign Investment (PMA) in line with the maintained domestic investment climate," concluded Perry.