JAKARTA (Reuters) -Indonesia finance minister Sri Mulyani Indrawati said on Tuesday the rupiah exchange rate will remain stable with an upside bias given the pressure from a strong dollar has begun to ease.
Sri Mulyani made the comment at a press conference as the chair of Indonesia’s Financial System Stability Committee, which comprises the finance ministry, the central bank, the Financial Services Authority and the deposit insurance corporation.
Sri Mulyani said stability in the rupiah will be fostered by some of the pressure coming off from a strong dollar. The U.S. currency has started to lose some of its shine recently on expectations the Federal Reserve will soon start to cut interest rates.
By 04:34 GMT, the rupiah advanced 0.16% to 15,780 against the dollar, its strongest level in the last four days.
The rupiah slumped to more than a 2-1/2-month low of 15,845 on Friday following local media reports that Sri Mulyani could quit ahead of the Feb. 14 presidential election, which raised questions about the country’s fiscal outlook.
Her ministry in response has said Sri Mulyani “continues to carry out her duties in managing state finances”.
Bank Indonesia (BI) sees the rupiah strengthening in the second half of 2024, its governor Perry Warjiyo said at the same press conference, adding the central bank will continue to intervene in the foreign exchange (FX) market to stabilise rupiah.
“If there is high pressure on the rupiah, we will stabilise it…and guiding the currency to reflect its fundamental level,” he said.
The governor also said that the central bank has been buying bonds in the secondary market to sterilise its foreign currency intervention. BI has bought 8.8 trillion rupiah ($557.49 million) worth of bonds so far in 2024.
Sri Mulyani expects Indonesia’s economic growth last year to be around 5%. Indonesia’s statistics bureau is set to release the official 2023’s economic growth data on Feb. 5.
For 2024, the last term for President Joko Widodo, the government has set the economic growth target at 5.2%.
($1 = 15,785.0000 rupiah)
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