The rupiah rebounded by almost 15 percent since the end of March to reach 13,877 per US dollar on Friday, Bloomberg data shows, erasing most of the losses it recorded in the first three months of the year amid outbreak fears.

“Foreign investors’ confidence in Indonesia’s economy is getting better as reflected by rising capital inflow into government bonds,” BI Governor Perry Warjiyo told reporters in a live-streamed news conference on Friday. “The rupiah remains undervalued and will strengthen further.”

The rupiah was still undervalued, Perry claimed, as the country’s credit default swaps had yet to fall to pre-pandemic levels while its current account deficit (CAD) had narrowed and inflation remained low.

On March 23, the rupiah crashed to 16,575 against the US dollar, its lowest level since the 1998 financial crisis. Investors sold US$10.34 billion worth of assets in the first quarter of this year, according to Finance Ministry data.

The government and the central bank have pledged to strengthen their cooperation and measures to ensure macroeconomic and financial stability. BI decided to keep its benchmark interest rate at 4.5 percent last week, despite room for further easing, to maintain financial market stability.

The financial market is currently being buoyed by hopes of an economic recovery as Jakarta, Indonesia’s financial hub and an engine of growth for the economy, prepares to reopen, with some offices, restaurants and retail outlets permitted to resume operation from June 8 under strict health protocols.

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