Rupiah Below Rp15,500, Foreign Capital Rushes In
Since last week, the rupiah exchange rate has strengthened below Rp15,500 per US dollar (USD). Although it fluctuated throughout this week (August 26-30, 2024), the rupiah exchange rate remained below Rp15,500.
According to the official information from Bank Indonesia (BI) released this weekend (August 30, 2024), the rupiah was recorded at the (bid) level of Rp15,410 per USD at the market close on Thursday (August 29, 2024).
On the other hand, the yield on the 10-year Indonesian Government Securities (SBN) also declined to 6.61 percent.
Meanwhile, the US dollar index or DXY strengthened to 101.34, and the yield on the 10-year US Treasury Note increased to 3.862 percent.
The DXY is an index that reflects the movement of the US dollar against six major currencies: the Euro (EUR), Yen (JPY), Pound Sterling (GBP), Canadian dollar (CAD), Swedish Krona (SEK), and Swiss Franc (CHF).
At the market opening on Friday (August 30, 2024), the rupiah was slightly weaker at the (bid) level of Rp15,415. Meanwhile, the yield on the 10-year SBN rose to 6.75 percent.
In the afternoon, at market close, according to Bloomberg, the rupiah closed 0.20 percent or 31.5 points weaker at Rp15,455, although it remained below Rp15,500. Over the past month, the rupiah has strengthened by around 5 percent.
Other Asian currencies showed varying movements against the USD at Friday's market close. Some strengthened, while others weakened, but the changes were not significant, below 0.15 percent.
Currencies that weakened more than the rupiah were the Malaysian ringgit (down 0.27 percent) and the Philippine peso (down 0.25 percent).
Alongside the rupiah's strengthening compared to last week, Indonesia's 5-year credit default swap (CDS) premium, as of August 30, 2024, fell to 65.87 bps, compared to 66.86 bps on August 23, 2024.
Foreign portfolio capital inflows continued to flow strongly into Indonesia, particularly in the capital market sector. Bank Indonesia recorded that between August 26 and 29, 2024, non-residents (foreigners) made net purchases of Rp6.21 trillion.
These purchases consisted of Rp3.89 trillion in the stock market, Rp1.56 trillion in Bank Indonesia Rupiah Securities (SRBI), and Rp0.76 trillion in the Government Securities (SBN) market.
During 2024 up to August 29, 2024, non-residents recorded net purchases of Rp187.66 trillion in SRBI, Rp12.79 trillion in the stock market, and Rp9.20 trillion in the SBN market.
Meanwhile, throughout the second half of 2024 (up to August 29, 2024), non-residents recorded net purchases of Rp57.31 trillion in SRBI, Rp43.15 trillion in the SBN market, and Rp12.45 trillion in the stock market.
Bank Indonesia is optimistic that the exchange rate will continue to strengthen, driven by an increase in foreign exchange reserves, which reached USD145.4 billion as of July 2024, as well as foreign portfolio investment flows attracted by the yields on SBN and SRBI.
