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Bank Indonesia defends strategies as rupiah hits lowest point since the pandemic era

Jakarta Globe - June 14, 2024

Arnoldus Kristianus, Jakarta – The Indonesian rupiah weakened against the US dollar, reaching Rp 16,400 on Friday, its lowest point since the pandemic era in April 2020. Despite this decline, Bank Indonesia (BI) believes the rupiah's performance remains relatively strong compared to other countries.

According to Bloomberg data, the rupiah's exchange rate on Friday depreciated by 0.88 percent to Rp 16,413 per dollar. The rupiah has weakened more than 6 percent year to date.

BI Governor Perry Warjiyo said that the rupiah's value should be viewed in a broader context. He noted that the current situation is better compared to the end of 2023.

"Please consider the situation from the end of last year. Indonesia's depreciation rate is quite low compared to Korea, the Philippines, Thailand, and Japan. Our depreciation is relatively low and stable," Perry said in Jakarta on Friday.

Perry emphasized that the rupiah's exchange rate has remained stable despite global economic volatility. This stability has been maintained through triple intervention strategies, including the Domestic Non-Delivery Forward (DNDF) market, the spot market, and the government bonds (SBN) market.

"We have taken many measures, including intervention and attracting foreign portfolios into the country. Everything is running well, stable, and has been appreciated by the president," Perry added.

Ibrahim Assuaibi, Director of Laba Forexindo Berjangka, warned that the current exchange rate and high interest rates pose threats to Indonesia's economy. If these conditions persist, Indonesia could face severe consequences, such as layoffs and weakened purchasing power.

"The current economic data is causing concern among various parties. Additionally, prices of goods continue to rise, while consumer purchasing power is not at its best," Ibrahim said.

Source: https://jakartaglobe.id/business/bank-indonesia-defends-strategies-as-rupiah-hits-lowest-point-since-the-pandemic-er