Rupiah strengthens as interest in government bonds remains high

Jakarta (ANTARA) - The Rupiah exchange rate at the close of trading in Jakarta on Thursday strengthened by 41 points, or 0.24 per cent, to Rp16,759 per US dollar, from Rp16,800 per US dollar previously.

Analyst at Bank Woori Saudara, Rully Nova, said that the strengthening of the Rupiah was influenced by continued strong market interest in government bonds.

“Market interest in government bonds remains high because they still offer competitive returns while fiscal management will continue to be well-managed,” he told ANTARA in Jakarta on Thursday.

It was recorded that market interest in Indonesia’s global euro bonds remains very high. This is reflected in an oversubscription of 3.4 times, or 9.2 billion euros, from a total offering of 2.7 billion euros.

According to Rully, this indicates that the government’s sources of financing to expand fiscal space are still adequate and at a low cost.

In addition, the strengthening of the Rupiah was also triggered by a response to US President Donald Trump’s speech regarding tariffs.

As is known, the US has begun implementing a temporary global tariff of 10 per cent, and the White House is reportedly seeking to increase the tariff to 15 per cent, following a decision by the Supreme Court to overturn Trump’s reciprocal tariff measures.

In front of the US Congress, Trump said that almost all countries and companies want to maintain the tariff agreements they had made before the US Supreme Court’s decision on tariffs was issued.

“The trade war is expected to reduce trade volume with the US, so the need for dollars for both exports and imports, as well as for foreign exchange reserves, will decrease,” said Rully.

The Jakarta Interbank Spot Dollar Rate (JISDOR) of Bank Indonesia also strengthened to Rp16,758 per US dollar from Rp16,813 per US dollar.