An employee counts banknotes at a money changer. (Antara/Sigid Kurniawan)
Bank Indonesia monetary management departement head Nanang Hendarsah said on Friday that the rupiah exchange rate againt the US dollar had begun to rebound as the external pressure on the currency had started to subside.
Nanag mentioned two factor for lessening pressure on the rupiah, namely moves by some central bank of developed countries, such as Switzerland, Australia and Sweden. Those banks have decided recently to maintain a relaxed monetary policy stance.
“Even if the federal funds rate will be increased at the FOMC (Feeral Open Market Committe) meeting, next week, analysts doubt that would strengthen the US dollar exchange rate.” Nanang said as quoted by kontan.id., adding that the US dollar index, which in May was at 95.6 had since declined to 93.8.
Nanang said the second factor was that investor’trust in emerging market was on a recovery trend. “As an example. this was marked by the yield of Indonesian government bonds, which touched 8.7 percent,” he said.
On Thursday, the foreign capital inflow to government bonds reached RP 2.8 trillion ($ 189 million), Nanang said, ading thet was an indication that foreign investor’ trust put their funds in Indonesia had recovered. (bnn)