Rupiah approaching Rp17,000 as Finance Minister affirms strong economic fundamentals

Jakarta — Finance Minister Purbaya Yudhi Sadewa responded to the movement of the rupiah’s exchange rate against the US dollar, which has been reported as approaching the Rp17,000 level.

Purbaya stated at the Presidential Palace complex in Jakarta on Tuesday that the rupiah’s current position remains around Rp16,800 per US dollar, and this condition can still be managed so long as the foundation of the national economy remains strong.

“Not quite — it’s still around Rp16,800. As long as our economic fundamentals are solid, controlling the rupiah is easier than when the economy is in chaos,” Purbaya said whilst responding to a call from President Prabowo Subianto.

Purbaya explained that the stability of the rupiah’s exchange rate is significantly influenced by healthy domestic economic conditions and strong coordination between the government and monetary authorities.

According to him, the principal step needed is to ensure that economic growth remains steady and liquidity within the financial system is sufficient.

He added that Bank Indonesia continues to monitor exchange rate movements in the market to maintain the rupiah’s stability amid global market dynamics.

“If we ensure that economic developments are solid, money in the system is adequate, and Bank Indonesia monitors exchange rate conditions, then good cooperation between the government and BI is necessary to maintain exchange rate stability,” he said.

Purbaya regarded solid coordination between the government and Bank Indonesia as facilitating efforts to contain the impact of global market volatility on the rupiah’s movement.

“If we are unified in this way, it is not too difficult to manage global market volatility,” he said.

The rupiah’s exchange rate at the close of trading in Jakarta on Tuesday strengthened by 86 points or 0.51 per cent to Rp16,863 per US dollar from the previous closing of Rp16,949 per US dollar.

Muhammad Amru Syifa from the Indonesia Commodity & Derivatives Exchange (ICDX) Research and Development said the rupiah’s strengthening was influenced by a statement from US President Donald Trump that the conflict with Iran was nearing resolution.