Selasa 24 Oct 2023 08:28 WIB

Minister of Finance to Mitigate the Weakening of Rupiah

Market participants read that higher for longer policy by the Fed will occur.

Rep: Dedi Darmawan Nasution/ Red: Fitriyan Zamzami

Foto: ANTARA/Mentari Dwi Gayati

Chairman of the Financial System Stability Committee (KSSK) who is also Finance Minister Sri Mulyani gave a press statement at the Presidential Palace in Jakarta on Monday (23/10/2023).

REPUBLIKA.CO.ID, JAKARTA -- Minister of Finance Sri Mulyani Indrawati prepared mitigation measures to prevent further weakening of the exchange rate (exchange rate) of the rupiah against the US dollar earlier this week. The rupiah exchange rate traded between banks in Jakarta on Monday morning weakened by 0.06 percent or 10 points to Rp 15.883 per USD from Rp 15.873 per ESD earlier.

“We will continue to synchronize monetary and fiscal policies so that in situations where the culprit is a country like the United States, the impact can be mitigated and we minimize both on exchange rates, inflation, economic growth, and the stability of the financial system,” said Sri Mulyani during a meeting at the Presidential Palace in Jakarta on Monday (23/10/2023).

Baca Juga

She explained that the government will continue to synchronize monetary and fiscal policies intensively in light of the still strong economic conditions in the United States.

Sri Mulyani explained that the weakening of the rupiah is a consequence of global conditions, one of which is high inflation in the United States and economic conditions that are still quite strong. “They give signals or are read by the market that higher for longer will occur and this is what causes a lot of capital flowing back to the US,” Sri Mulyani said.

Sri Mulyani believes that market participants are currently reading global interest rate policy at high levels over the long term or higher for longer to occur. The conditions caused many investors to withdraw their foreign capital to the United States causing the US dollar index to strengthen globally.

At the close of trading today, the rupiah weakened by 61 points or 0.38 percent to Rp 15.994 per USD from the previous close of Rp 15,873 per USD. Bank Indonesia's Jakarta Interbank Spot Dollar Rate (JISDOR) on Monday also weakened to Rp 15.943 from the previous Rp 15.856 per USD.

These conditions also caused the dollar index to strengthen at 106. Although earlier, Minister of State, Bank Indonesia (BI) Governor Perry Warjiyo said the dollar index was at 93. “That means the dollar is strengthening globally,” he added.

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