Economic Stability Able to Suppress The weakening of Rupiah

Director of the Department of Bank Indonesia's Economic and Monetary Policy Firman Mochtar said the well-established economic stability is able to maintain the movement of the rupiah against the US dollar.
"This condition can not be separated from the achievement in maintaining the stability of economic structure that is better so as to hold the rupiah," said Firman in the event of dissemination of Indonesia Economic Report 2017 in Semarang, Wednesday (25/4/2018).
Firman said the weakness of the currency against the US dollar is not only experienced by the Rupiah, but also the currency in other developing countries. Nevertheless, rupiah depreciation is still lower than other currencies.

Da believes the rupiah depreciation is not too high is supported by the improvement of economic structure both from economic growth, inflation and current account balance so that it can naturally resist the occurrence of deeper turmoil.
So far, the central bank has also taken various steps to keep the exchange rate under control and pressure remains low, one of them by requiring the use of rupiah currency in every transaction in all parts of Indonesia.
"BI has taken a structural policy to manage foreign exchange demand, despite global pressure, one of the obligations to use rupiah since 2015 at the domestic level," said Firman.
In addition, added Firman, another step is to require hedging policies against any transactions that use the US dollar.

"Implementation of corporate debt management by hedging is part of self-defense to support rupiah management," he explained.

Meanwhile, the exchange rate of rupiah that was interbank transactions in Jakarta, Wednesday afternoon, moved down by 37 points to Rp13.909 per USD compared to the previous position of Rp13.872 per USD.

Binaartha Securities analyst Reza Priyambada said the rupiah weakness is in line with currencies in developing countries. With rising US bond yields and a higher US interest rate outlook, the US dollar is the concern of market participants.