Rupiah exchange rate weakened 4.55 percent, Sri Mulyani versus Malaysia, Thailand versus India

Bisnis.com, JAKARTA – The exchange rate of the rupiah recorded a depreciation of 4.55 percent (YTD/YtD) against the United States Dollar (US$) as of 28 July 2022. Despite this, the condition of the rupiah is still considered to be better than other currencies of neighboring countries.

Bank Indonesia noted that on July 28, 2022, per US$1, the selling rate reached Rp. 15,095.10 while the buying rate was Rp. 14,944.90.

The Chairman of the Financial System Stability Committee (KSSK), who is also Finance Minister, Sri Mulyani Indrawati, stated that currencies around the world have come under pressure against the US dollar, in line with the high level of uncertainty in global financial markets and the tightening of US dollar monetary policy in the United States.

The rupiah also came under pressure, falling 4.55 percent (YtD). Still, Sri Mulyani assessed that Indonesia is relatively able to deal with this pressure as the rupiah weakening is not as severe as in other countries.

“4.55 percent weakening [YtD] of the rupiah is better compared to the weakening or devaluation of various currencies in the region,” Sri Mulyani said at the KSSK press conference on Monday (08/01/2022).

He said the Malaysian ringgit fell 6.46 percent, the Indian rupee 6.80 percent and the Thai baht 9.24 percent year-to-date.

High global inflation has prompted many countries, particularly the United States, to tighten monetary policy and raise interest rates more aggressively. According to Sri Mulyani, this led to the withdrawal of funds from developing countries and affected the development of the exchange rate.

At the beginning of the third quarter of 2022, from July 2022 to July 28, 2022, portfolio investment recorded a net outflow of $2.05 billion. The condition is inversely proportional to the second quarter of 2022, which still saw net inflows of $0.2 billion.

“Uncertainty in global financial markets due to high inflation in developed countries and monetary tightening has led to foreign capital outflows, particularly portfolio investment, and this has depressed exchange rates in various developing countries,” Sri Mulyani said.


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