8-5-2024 (JAKARTA) Indonesian central bank governor Perry Warjiyo revealed on Wednesday that increased capital inflows have been observed since Bank Indonesia raised interest rates last month to stabilize the rupiah, expressing confidence that this trend will persist.
“Our decision to raise interest rates and implement higher rates for rupiah securities has bolstered market and investor confidence, consequently attracting more capital inflows into Indonesia,” stated Warjiyo.
He disclosed that total capital inflows into Indonesia had surpassed 20 trillion rupiah (US$1.25 billion) thus far in May.
Warjiyo further affirmed that Bank Indonesia remains committed to fortifying the currency to surpass the 16,000 mark against the dollar.
Last month, the rupiah depreciated to 16,285 per US dollar, marking its lowest point since the onset of the Covid-19 pandemic, as escalating tensions in the Middle East and deferred expectations of US interest rate cuts spurred capital outflows from emerging economies.
