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Jakarta Post

US effect only temporary on rupiah: Bank Indonesia

  • Anton Hermansyah
    Anton Hermansyah

    The Jakarta Post

Jakarta   /   Wed, October 4, 2017   /   09:30 pm
US effect only temporary on rupiah: Bank Indonesia Bank Indonesia Governor Agus Martowardojo (JP/Anton Hermansyah)

Bank Indonesia (BI) says a weakened rupiah exchange rate owing to pressure from United States policy would be temporary because the economy was strong and stable.

"The government can keep inflation low and we have a balance of payment surplus. So, we expect the weakening of the rupiah to be temporary," BI Governor Agus Martowardojo said in Jakarta on Wednesday.

He explained the weakening of the rupiah had been caused by signs that the US Federal Reserve would raise its policy rate in December and President Donald Trump's tax reform plan.

Both events had triggered foreign investors to release assets in emerging countries and as a result, the rupiah had weakened, he said.

According to BI data, the rupiah exchange rate was Rp 13,204 per dollar on Sept. 20 when US media announced the Fed's stance. It further weakened to Rp 13,317 per dollar on Sept. 27 when Trump announced the tax reform plan and on Tuesday, it was recorded at Rp 13,514 per dollar.

Agus said other currencies had also experienced the same pressure. (bbn)