REPUBLIKA.CO.ID, JAKARTA -- The rupiah strengthened against the US dollar at the start of 2018 thanks to the improving domestic economy, Bank Indonesia (BI) Governor Agus Martowardojo said.
"I think the confidence in the domestic economy has played a great role," he stated here on Wednesday.
The improving domestic economy is reflected by the rising inflow of foreign fund to the capital market, adding to foreign currency supply, he noted.
"In general, the rupiah has strengthened thanks to the good domestic economy despite risks from external factors," he added.
He assured that domestic economic fundamentals will remain unaffected despite volatile global situation due to the Fed rate adjustment and the US tax reforms.
"The external factors will not more or less change very much, but confidence in the domestic economy is good, as reflected by the capital market and the rupiah's manageable exchange rate throughout 2017," he remarked.
The rupiah rose 25 points to close at Rp13,489 per dollar at the Jakarta inter-bank spot market on Wednesday morning, as compared to the previous closure of Rp13,514 per dollar.
Money market observer Rully Nova of Bank Woori Saudara Indonesia revealed that the relatively conducive domestic sentiments have pushed the rupiah to appreciate against the dollar.
"The domestic economic data which have been released are quite positive, so that the fluctuation of the rupiah's exchange rate remains controllable," he pointed out.
He explained that the inflation rate, which met the government target range, has been one of the positive factors for the domestic money market.
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