Rupiah Climbs on Forex Reserves Increase
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The rupiah climbed 20 bps this morning at the Jakarta Interbank Spot Dollar Rate. The rupiah now trades for Rp13,278 per US dollar, from what analysts said to be the impact of Indonesia’s foreign exchange (forex) reserves’ increase.
Samuel Sekuritas economist Rangga Cipta said on Friday, June 9, that the forex reserve increase in May to US$124.95 billion helped the rupiah strengthened. But the gain is relatively limited as the US dollar is also on an uptrend over speculations that the Federal Open Meeting Committee will result in a Fed Fund Rate hike.
Meanwhile, money market observer from Bank Woori Saudara Indonesia, Rully Nova, said the forex increase is expected to help maintain the rupiah stability on the long run.
“With stable fluctuations, the domestic economic activities will be able to increase, and eventually provide investors’ with comfort and security when making investments,”
Questions & Answers
Q.By how much did the rupiah climb this morning?
By how much did the rupiah climb this morning?
The rupiah climbed by 20 basis points this morning at the Jakarta Interbank Spot Dollar Rate. It now trades at Rp13,278 per US dollar, up from its previous level.
Q.What is the current value of Indonesia's foreign exchange reserves?
What is the current value of Indonesia's foreign exchange reserves?
Indonesia's foreign exchange reserves increased to US$124.95 billion in May. This increase has been cited by analysts as a factor contributing to the rupiah's recent strengthening.
Q.Why is the rupiah's gain considered limited despite the forex reserve increase?
Why is the rupiah's gain considered limited despite the forex reserve increase?
The rupiah's gain is relatively limited because the US dollar is also on an uptrend. This uptrend is due to speculations that the Federal Open Market Committee will implement a Fed Fund Rate hike.
Q.How is the increase in forex reserves expected to benefit the Indonesian economy long-term?
How is the increase in forex reserves expected to benefit the Indonesian economy long-term?
The increase in forex reserves is expected to help maintain the rupiah's stability in the long run. Stable fluctuations will encourage increased domestic economic activities and provide comfort for investors.
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