REPUBLIKA.CO.ID, JAKARTA — The economic recovery of the United States (US) reinforced the market expectations for The Fed’s rate hikes. Bank Indonesia (BI) said the weakening of the rupiah was an external impact due to the strengthening of the US.
Seeing these conditions, BI said it will still intervene in the money market so as not to pressure the rupiah continues to depreciate. “It looks US economy grew better 2.3 percent. There was improvement in the employment data. If the US condition is good, the Fed Funds Rate will go up,” said BI Governor Agus Martowardojo, on Friday, July 31.
He added that the weakening of the rupiah caused also by the demand for the US dollar was quite high at the end of July 2015 to pay debts. Then the rupiah being kept depressed.
“Currently rupiah conditions greatly influenced by the development of the world economy,” said Agus.
Even so he said, the depreciation of the rupiah was still considered better than other developing countries in the region and the world.
“If we see the depreciation of the rupiah at one percent (month to date). While the currencies of Brazil, Turkey, South Africa, is in the range of two to three per cent (month to date),” he explained.
In year-to-date (ytd), rupiah depreciated eight percent, while Brazil 25 percent, Turkey 18 percent, and South Africa 8 percent.
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