The Rupiah Strengthened to Below Rp16,000 per US Dollar USD
The Rupiah strengthened to below Rp16,000 per US dollar (USD) following an increase in Indonesia's foreign exchange reserves and an anticipated recession in the United States economy, according to Bank Indonesia (BI).
On Friday, August 9, 2024, BI's Assistant Governor and Head of the Communication Department, Erwin Haryono, reported that the Rupiah closed at a bid level of Rp15,890/USD at the end of trading on Thursday, August 8, 2024.
This appreciation of the Rupiah continued despite the yield on the US Treasury Note for ten years rising to 3.988 percent, while the yield on Indonesia's ten-year government bonds decreased to 6.78 percent.
The Rupiah's strengthening was accompanied by a significant decline in Indonesia's five-year credit default swap (CDS) risk premium, from 79.25 basis points on August 2, 2024 to 76.32 basis points.
Foreign portfolio capital inflows into Indonesia remained robust, with non-residents recording a net purchase of Rp1.62 trillion from August 5-8, 2024, comprising net purchases of Rp2.24 trillion in government bonds and Rp0.65 trillion in stocks, offset by a net sale of Rp1.28 trillion in Bank Indonesia Rupiah Securities (SRBI).
Throughout 2024 up to August 8, non-residents had a net sale of Rp21.75 trillion in government bonds, alongside net purchases of Rp174.51 trillion in SRBI and Rp0.66 trillion in the stock market.
In the second half of 2024, non-residents made net purchases of Rp44.16 trillion in SRBI, Rp12.20 trillion in government bonds, and Rp0.32 trillion in stocks.
At the market open on Friday, August 9, the Rupiah weakened slightly to a bid level of Rp15,925/USD, but remained below Rp16,000. By the close of trading, the Rupiah exchange rate settled at Rp15,924, a 0.19% decrease from the previous trading day.
