Rupiah Drops to Rp 14,325 Against US Dollar

The rupiah exchange rate against the US dollar dropped to Rp 14,325 at 2:09 p.m. on Thursday
its weakest position since Oct. 6, 2015, according to kontan.co.id.

Finance Minister Sri Mulyani Indrawati said the rupiah’s depreciation had been triggered by internal and external factors. She explained that the internal factors related to macroeconomic policy frameworks, starting from the fiscal and monetary to the payout ratio.

Sri Mulyani added that the government would look into the fiscal side, particularly the budget deficit, state revenue and state expenditure as well as the schedule of the government’s debt paper issuance. “[All of the efforts is] to minimize the vulnerability,” she said in Jakarta on Thursday.

As for external factors, the government will monitor the policy change in the United States, the strengthening US dollar and the movement of foreign capital.

Sri Mulyani said the weakening rupiah would not change the strength of the country’s economy.

“We see it as a normal adjustment,” she added as reported by kontan.co.id.

Monex Investindo analyst Faisyal said the rupiah was still under pressure as the market was still waiting for the decision made at Bank Indonesia’s (BI) board of governors meeting on Thursday and Friday.

“There is speculation that the reference rate would be maintained at 4.75 percent,” Faisyal added.

Samuel Sekuritas Indonesia economist Ahmad Mikail believed that the strengthening US dollar was the main factor for the weakening of the rupiah. “The weakening of Asian currencies has pushed the value of the rupiah further down,” he added.

He predicted that BI would increase its seven-day reverse repo rate by 25 basis points.

courtasy : Thejakartapost
photo : Kompasiana.com

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