BI: Not Only Rupiah Exchange Rate Weakens Against US Dollar

Senior Deputy Governor of Bank Indonesia (BI) Mirza Adityaswara stated that the weakening of the exchange rate against the US dollar did not only occur in the rupiah. It was recorded that the exchange rate of the Indian rupee, Japanese yen, and Singapore dollar also plummeted. 

"The Indian rupee weakened 0.4 percent, the Japanese yen weakened 0.33 percent, and the Singapore dollar weakened 0.32 percent today," he said at the Ritz Carlton Hotel, Jakarta, Tuesday, October 3, 2017. "This is global." Meanwhile, the rupiah exchange rate is now weakening in the range of Rp13,500 per US dollar. 

Mirza noted that the strengthening of the US dollar also occurred at the end of last month and had an impact on a number of currencies. On September 20, for example, the rupiah was recorded to have weakened 2.2 percent. The yen also weakened against the US dollar by 1.7 percent and the Singapore dollar by 1.6 percent. 

According to Mirza, the strengthening of the US dollar was the impact of US President Donald Trump's plan to cut taxes. Although not yet comprehensive, Mirza assessed that if accepted by Congress and the Senate, the plan could be a hope for American economic growth. 

The American economy, said Mirza, could grow even faster. As a result, interest rates will increase rapidly and the dollar will continue to rise. 

The strengthening of the US dollar was also supported by the statement of Janet Yellen, Governor of the United States Central Bank or the Federal Reserve The Fed, a week ago. She stated that there was a possibility of an interest rate increase in December. 

Another factor in the appreciation of the US dollar, according to Mirza, was speculation regarding the replacement of the Fed Governor. "These things, by the financial market, have been used as a topic for the last 10 days," he said. He said the impact depends on the fundamentals of each country. 

In general, Mirza emphasized that Indonesia's fundamentals are in good condition. This can be seen from the healthy balance of payments, good exports, and a surplus balance of payments. 

Tag: Bank Indonesia Mirza Adityaswara Rupiah