The value of the rupiah has stabilized in recent days as the domestic supply of dollars has increased due to inflows from returning investors and more exporters converting their earnings, Bank Indonesia Governor Perry Warjiyo said on Friday (21/09).
“The rupiah has stabilized and it tends to strengthen,” Perry said. “Many fund managers have begun to invest and allocate their portfolios to emerging markets. So what was going out has begun to return.”
The rupiah traded at 14,815 to the dollar at 1.05 p.m. in Jakarta on Friday, marginally stronger than Thursday’s closing.
Perry also said inflation is expected to stay benign this year despite the rupiah’s fall, saying the rate is seen near the lower end of Bank Indonesia’s 2.5 percent to 4.5 percent target range. The annual inflation rate stood at 3.20 percent in August.
Bank Indonesia has raised interest rates four times since mid-May to defend the rupiah, which fell to its weakest in 20 years amid wider emerging market selloffs. It will meet again next week to review monetary policy.