Following the post-Eid holiday period, the Indonesian rupiah has taken a sharp nosedive, breaching the critical level of Rp16,000 against the US dollar. This sudden depreciation has stirred considerable unrest, particularly across social media platforms, prompting widespread concern among the populace. Reacting to this alarming trend, Bank Indonesia Governor Perry Warjiyo has stepped forward to address the pressing issue.
In response to the currency’s downward spiral, Governor Perry Warjiyo has affirmed the central bank’s unwavering commitment to closely monitor the rupiah’s exchange rate, which has plummeted to Rp16,000 per US dollar in the wake of the Eid holiday.
Assuring stability in the foreign exchange market, the Indonesian Central Bank has pledged to employ a variety of strategies, including spot market interventions and non-delivery forwards (NDF), to safeguard the rupiah’s value amidst turbulent economic conditions.
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“We are committed to preserving the stability of the exchange rate through both spot and non-delivery forward interventions. We are in close coordination with the government on fiscal matters to ensure monetary and fiscal stability,” Governor Perry Warjiyo emphasized during a press briefing at the Presidential Palace complex on Tuesday (4/16/2024).
Furthermore, Governor Warjiyo underscored that additional measures would be implemented under the guidance of President Joko Widodo (Jokowi) to mitigate the adverse effects of the rupiah’s depreciation against the US dollar.
In light of recent developments, it is worth noting that the rupiah opened weaker at Rp16,210.5 against the US dollar on Tuesday (4/16/2024), marking a significant decline following the Eid holiday period.
According to data from Bloomberg, the rupiah experienced a substantial decrease of 353.50 points or 2.23%, settling at Rp16,201.5 per US dollar. Meanwhile, the US dollar index registered a marginal uptick of 0.14%, reaching 106.35.
Across the Asian region, most currencies experienced depreciation at the start of the trading day. The South Korean won depreciated by 1.09%, followed by the Malaysian ringgit with a 0.25% decline, and the Japanese yen with a 0.07% decrease. Additionally, the Thai baht and Indian rupee both weakened, falling by 0.31% and 0.03%, respectively.
Meanwhile, Bank Indonesia (BI) has reported a decline in Indonesia’s foreign exchange reserves, which stood at US$140.4 billion at the end of March 2024, compared to US$144.0 billion at the end of February 2024.
This reduction in reserves can be attributed to various factors, including government debt repayments, anticipation of corporate foreign exchange liquidity requirements, and efforts to stabilize the rupiah’s exchange rate amid ongoing global financial market uncertainties. Despite the decline, Indonesia’s foreign exchange reserves remain robust.
Furthermore, Bank Indonesia asserts that these reserves play a crucial role in bolstering the country’s external resilience and maintaining stability in both macroeconomic and financial systems.
