The Government and Bank Indonesia Respond to the Weakening of the Rupiah to the Level of IDR 18,000
The rupiah exchange rate against the United States dollar weakened to the level of IDR 18,000 on Friday, triggering a quick response from the government and Bank Indonesia.
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Garuda's currency closed lower by 0.45% to IDR 18,000 per US dollar at the end of last week. Throughout the trading session, the movement of the rupiah continued to be in the red zone with the weakest point reaching the level of IDR 18,070 per dollar.
The weakening of the exchange rate occurred when the US dollar index was being corrected. This condition shows that major pressure is more influenced by domestic sentiment, especially regarding announcements from MSCI regarding the Indonesian stock market.
MSCI opened a consultation regarding the proposal to change the classification of the Indonesian stock market from Emerging Market to Standalone Market. The proposal came ahead of schedule in November and sparked concerns among foreign investors.
Bank Indonesia takes consistent intervention steps in the domestic and offshore markets to maintain exchange rate stability. Meanwhile, Indonesia's external strength is considered to be still maintained through the position of foreign exchange reserves at the end of September.