The Intense Intervention to Ward Off Rupiah's Psychological Level

By Editorial Team 03/04/2024
Dollar Indonesia
Summary

The rupiah has climbed above the 15,900 mark against the US dollar since the start of April, marking its highest level in four years or since March 2020. This is mainly fueled by increased demand for greenbacks driven by the foreign capital outflow from the bond market. Investors are reacting to various uncertainties, including the slower and lesser-than-expected US policy rate cut, and domestic political turbulence, prompting a shift towards safer assets.

The Head of the Monetary Management Department at Bank Indonesia (BI) Edi Susianto also pointed out the significant impact of the falling yuan on the rupiah. "It seems that the rupiah is heavily influenced by the weakening yuan. Additionally, domestically, there's a rising demand for US dollars due to repatriation, along with continued foreign outflows from the government bond market," explained Edi Susianto on Tuesday (2/4).

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