BI: The weakening of the Rupiah is Only Temporary

January 31, 2024, 06.16 AM | Reporter: Bidara Pink

ILUSTRASI. The Governor of Bank Indonesia said that the rupiah's fundamentals remain intact, with positive domestic developments.

RUPIAH - JAKARTA. The rupiah exchange rate plummeted, almost breaking through Rp 16,000 per US dollar last week.

Bank Indonesia (BI) Governor Perry Warjiyo said, the weakening of the rupiah exchange rate is only temporary or short-term.

Now, the short-term weakening of the rupiah was driven by circulating news that reached Indonesia.

However, Perry emphasized that the fundamentals of the rupiah exchange rate are still maintained, with good domestic developments.

“The exchange rate fundamentally strengthens, even though it weakens in the short term,” Perry firmly stated, Tuesday (30/1) in Jakarta.

Bank Indonesia BI Governor Perry Warjiyo

These economic fundamentals are driven by a trade balance surplus for 44 consecutive months. Thus, it boosts the supply of foreign exchange (forex) in abundance.

“A trade balance surplus means, forex from exports is more than the demand for import forex,” added Perry.

In addition, Indonesia's economic growth is maintained with an inflation rate within the target range, plus good returns on government securities (SBN) and stocks.

Perry added, the rupiah fundamentals will be even more solid in the second semester of 2024. This is also in line with the potential decrease in The Fed's benchmark interest rate.