JAKARTA (TheInsiderStories) – Indonesian Rupiah closed higher to against American Dollar to 15,800 at the end of this week, up 2.17 compared to prior day parked at 16,250. The central bank’ governor, Perry Warjiyo rated, the local currency strengthened caused the global pressure has subsided and investors cheered measures by the policymakers.
“The global panic is easing because a large amount of fiscal stimulus has been agreed upon in the US worth of US$2.6 trillion as well as in Europe and other developing countries,” he told reporters through video conference today (04/09).
In addition, he continued, there are good supply and demand in the spot market and interbank bid offer also moves well. Plus, exporters and other participants supply foreign exchange revenues to the country.
“We hope that all importers or other market participants who need US Dollars will enter the spot market and use the DNDF facility. We also discussed with the SOEs (state own enterprises) minister so that the state firm’ foreign exchange needs could be provided through DNDF (domestic non deliverable forward),” said Warjiyo.
He also encourages global investors to enter the DNDF market caused the instruments offer attractive premium. Since COVID-19 outbreak, the Rupiah has been the worst Asian currencies, losing about 14 percent against the Greenback, as investors fled risky assets.
To stem the depreciation, Bank Indonesia unveiled a various measures, including buyback the state bond from the secondary market and clinching a US$60 billion repo lines with United States’ Federal Reserve.
Since last week, said the governor, capital outflow also subsided and even began to have inflows, among others through the government bond auction. He stated, “I got information, finance ministry has won Rp22.2 trillion ($1.39 billion) from the initial targets of Rp15 trillion because the bid was Rp35.15 trillion.”
This evidence, he added, showed that investor interest in Indonesia’ portfolio is still relatively high. Year to date, BI noted, net outflow recorded Rp145.1 trillion, of which Rp131.1 trillion from bond market and Rp9.9 trillion from stock market.
“Majority since COVID-19 broke out in February to March. So far, we have bought 166.2 trillion purchases from the secondary market,” he concluded.
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