The Jakarta Post
Bank Indonesia does not see any risk of the rupiah weakening to 15,000 against the US dollar as estimated by Standard & Poor (S&P) Global Ratings agency.
“We do not see any risk from the [rupiah] exchange rate side if we consider the current fundamental [economic] condition,” said head of BI monetary management department Doddy Zulverdi in Jakarta on Wednesday as reported by kompas.com.
Previously, S&P lead analyst for Indonesia and Malaysia Xavier Jean stressed that the rupiah's depreciation toward Rp 15,000 per US dollar was the level to watch. “Investors feel that Rp 15,000 is the psychological level beyond which they cannot continue operating,” he added.
From the domestic side, the Indonesian macroeconomic condition was strong enough to support the rupiah against the US dollar, Doddy said.
He said the central bank had seen a strengthening trend of the rupiah this week.
He said the rupiah's recent fluctuation was purely caused by external factors, particularly the estimation that the Federal Reserve would increase the fund rate for the fourth time.
However, he added, the global sentiment had started cooling down, helping the rupiah exchange rate to strengthen.
The global political dynamic of President Donald Trump wanting to meet with North Korean leader Kim Jong-un also added positive sentiment to the rupiah.
“If it [the meeting] happens, it will [further] help ease the pressure against the rupiah,” Doddy added. (bbn)