Bank Indonesia: Rupiah Exchange Rates Will Not Be Affected by Global Conditions

TRIBUNBATAM.id -  Bank Indonesia said the rupiah exchange rate was relatively stable, not significantly affected by global economic conditions and the Fed's benchmark interest rate reduction last time.

The Governor of Bank Indonesia, Perry Warjiyo, said that the stable exchange rate was driven by the supply and demand conditions of the domestic market. For this reason, he also thanked the banking and business world for maintaining that stability. 

"So, there is no significant influence on what is happening globally, including the Fed's interest rate cuts," BI Governor Perry Warjiyo said in Jakarta on Friday (11/01/2019).

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Regarding the Fed's interest rate cuts, Perry said, the Fed is more hawkish cut. Despite lowering interest rates, said Perry, the Fed implies a statement of the possibility of a rate cut going forward in the US with little probability. 

Perry said this condition made the flow of foreign capital continue to grow because investor confidence in the Indonesian economy was not affected by the decline in the benchmark interest rate.

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Not only that, Perry explained that the rupiah exchange rate at Rp 14,000 was at a stable level. In fact, its position is often below the level of Rp 14,000. 

But on the one hand, exporters also supply and move according to market mechanisms. This certainly supports exchange rate stability and shows that there is still room for the rupiah to continue to strengthen. The proof, several times the rupiah is below the level of Rp 14,000.

"That is an indication or room for the rupiah to strengthen. Of course by making inflation lower and also the economic prospects are quite good. Also credibility and confidence in existing policies," concluded Perry. (*) 

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