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Rupiah expected to hold steady at Rp 13,100 per dollar, economist says
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Getting stronger – A worker piles up rupiah banknotes at a Bank Mandiri cash center in Jakarta on Sept. 27. (Antara/Rosa Panggabean)
W
ith ongoing foreign inflows partly triggered by the government’s flagship tax amnesty program, the rupiah exchange rate is expected to hold steady at around Rp 13,100 per US dollar at the end of 2016 and will then strengthen in the following year, an analyst has said.
Mandiri Sekuritas chief economist Leo Putra Rinaldy said the rupiah briefly strengthened to around Rp 12,000 per dollar earlier this week on the back of the tax amnesty program, indicating that the rupiah had performed better than the currencies of other countries in the region.
As of Sept. 27, the rupiah had strengthened by 6 percent year-to-date (ytd), higher than the Singaporean dollar, which increased by only 4.1 percent, the Thai bath (4.0 percent), and the Malaysian Ringgit (3.9 percent).
"One of the causes is foreign fund inflows. Net foreign inflows have been dominated by flows to the bond market," Leo said during a media gathering in Bandung, West Java, on Friday.
From January to September, net foreign inflows amounted to Rp 158 trillion (US$12.14 billion), up more than three-fold from the Rp 47 trillion recorded during the same period of last year.
Leo said with a decrease in Indonesia’s current account deficit and a surplus in its balance of payments, the rupiah would hopefully stay at Rp 13,100 per dollar by the end of 2016 and continue to strengthen to around Rp 12,800 to Rp 13,000 per dollar in 2017. (ebf)
