The rupiah appreciated further on Friday, as the currency continues to move away from Rp 15,000 per United States dollar.

Bank Indonesia Governor Perry Warjiyo said the rupiah's appreciation was because of strengthening market confidence in the country’s economy.

“Thank God, the rupiah is stable at around Rp 14,300 per US dollar, even stronger today. There are various factors behind the appreciation, one of which is market confidence,” Perry said in Jakarta on Friday as quoted by kompas.com.

Meanwhile, according to the Jakarta interbank spot dollar rate (JISDOR), the rupiah exchange rate stood at 14,339 per US dollar, compared to Rp 14,408 per US dollar on Thursday and Rp 14,535 on Wednesday.

Perry said the government’s policies, which were introduced to improve the economy, were proving to be effective while BI’s policies to stabilize the market had started to work, indicated by better supply and demand.

“The market has developed very well in regard to supply and demand, as well as in transactions in spot and swap markets, in addition to the DNDF [domestic nondelivery forward]," said Perry.

On the DNDF, Perry said the hedging instrument was not only utilized by domestic investors but also foreign investors, while its spread was lower than Rp 50. “It indicates that the market mechanism works,” he added.

BI introduced DNDF transactions early in November to stabilize the rupiah, by providing an alternative exchange rate hedging instrument for businesspeople to mitigate against exchange rate fluctuations. (bbn)