JAKARTA. The rupiah exchange rate has been strengthening against the US dollar due to Indonesia's strong economic fundamentals, mainly with low inflation rate and high foreign capital inflows, said Bank Indonesia (BI) Governor Perry Warjiyo.
The rupiah exchange rate against the US dollar was briefly recorded at Rp 13,500 per US dollar. In the spot market on Monday (27/1), the rupiah exchange rate reached Rp 13,605 per US dollar.
"Fundamental and policy factors are the primary forces behind the strengthening [of the rupiah exchange rate]. Our inflation rate is low, which contributes positively to the rupiah exchange rate," said Mr Warjiyo during a meeting with the House of Representatives' Commission XI on Monday.
According to Mr Warjiyo, there were significant foreign capital outflows in 2019, which caused the rupiah exchange rate to reach Rp 15,000 per US dollar that year. Since then, due to foreign capital inflows the rupiah exchange rate has stabilised to around Rp 13,800 per US dollar.
"The rupiah has been strengthening due to lower current account deficit and adequate foreign capital inflows despite geopolitical tensions and the ongoing trade war," said Mr Warjiyo. (AM/MS)