Indonesian Rupiah Exchange Rate: Up 0.49% on Renewed Confidence
The Indonesian rupiah exchange rate continued its good performance on Friday (07/03) as it had appreciated 0.49 percent to IDR 11,425 per US dollar at 14:22 local Jakarta time based on the Bloomberg Dollar Index. The currency rose for a fifth consecutive week. Main reasons for this good performance are the improving global economy as well as the improving economy of Indonesia. Foreign funds are again entering Indonesia as investors have renewed confidence in Southeast Asia's largest economy.
This week, foreign investors recorded a net purchase of USD $86 million worth of Indonesian stocks (Monday to Thursday), pushing the benchmark Jakarta Composite Index closer to the 4,700 points mark. Bloomberg reported that "Overseas investors have increased their local-currency bond holdings by 21.25 trillion rupiah (USD $1.9 billion) this year."
Previously it had been reported that inflation is easing (7.75 percent year-on-year in February 2014) while the current account deficit has improved markedly from the first semester of 2013. Yesterday (06/03), Governor of Bank Indonesia stated that Indonesia's foreign exchange reserves will most likely have risen to around USD $102 billion by the end of February (the official figure will be released today).
Bank Indonesia's benchmark rupiah rate (Jakarta Interbank Spot Dollar Rate, abbreviated JISDOR) appreciated 1.37 percent on Friday (07/03) to IDR 11,395 per US dollar. Thus, the currency appreciated 1.73 percent this week.