Dollars Mulai Ngos-ngonsosan, Rupiah Berpotensi Menguat Disertai Masuknya Dana Foreign Ke Pasar Bonds

Illustration (Photo: Doc. Antara)

JAKARTA It is difficult to depreciate rupiah from foreign currencies, especially the US dollar, recently it seems that it will come to light. The signal was conveyed by the Minister of Finance (Menkeu) Sri Mulyani.

The Minister of Finance explained that this assumption was based on a decrease in the inflation rate in the United States in October 2022 to a level of 7.7 percent. This condition is believed to make the US central bank, The Federal Reserve (The Fed), slow the increase in the benchmark interest rate, aka the Fed Fund Rate (FFR).

"This will encourage foreigners to enter the emerging market bond market, including Indonesia in the November 2022 period," said the Minister of Finance in a written statement quoted on Friday, November 25.

The state treasurer also said that along with the improvement in the condition of the Indonesian bond market in November, it recorded an inflow of IDR 10.66 trillion month to date (mtd). Meanwhile, in October there was an outflow of IDR 17.03 trillion on a mtd basis.

"In addition, in terms of ownership, SBN is still dominated by banks and BI, while the portion of foreign ownership has gradually decreased since the end of 2019 (38.57 percent) to 14.06 percent as of November 22, 2022," he said.

For information, the decline in the rate of FFR has the opportunity to erode the dollar level, which has been quite superior to the currency of a number of countries. In addition, the entry of foreign funds into the country also has the potential to strengthen the rupiah exchange rate.

"Domestic SBN market performance is still resiliently supported by quite simple domestic liquidity and encourages the narrowing of LCY spreads. However, tightening monetary policy still needs to be watched out for," closed the Minister of Finance Sri Mulyani.