Some investors may have wondered why Indonesian stocks managed to rise more than 8 percent so far in 2017 (touching record highs), boosted by capital inflows, but the rupiah exchange rate (versus the US dollar) remained rather flat over the same period, especially in the February-May 2017 period).

Bank Indonesia Deputy Governor Sugeng informed that the central bank has been limiting rupiah strength through intervention on the foreign exchange market. A too strong rupiah would have a negative impact on Indonesia's export performance.

By 11:45 am local Jakarta time on Monday (08/05) the Indonesian rupiah had appreciated 0.08 percent to IDR 13,319 per US dollar (based on the Bloomberg Dollar Index). Meanwhile, Bank Indonesia's benchmark rupiah rate (Jakarta Interbank Spot Dollar Rate, abbreviated JISDOR) appreciated 0.11 percent to IDR 13,324 per US dollar.

Indonesian Rupiah versus US Dollar (JISDOR):

| Source: Bank Indonesia