Supported by Global and Domestic Factors, Rupiah Strengthens to Rp 14,600 per US Dollar

Throughout November 2018, the Indonesian Rupiah strengthened significantly, falling below Rp 14,700 per US dollar. Global factors, particularly the weakening of the US dollar against major world currencies, triggered the Rupiah's strengthening to below Rp 15,000 per US dollar since the end of the previous week.

On Monday, November 6th, the Rupiah exchange rate, based on Bloomberg data, closed at Rp 14,804 per US dollar, strengthening by 1.16% from the previous day's closing. This strengthening continued on Tuesday, November 7th. By 12:00 WIB (Western Indonesian Time), it was traded at Rp 14,661 per US dollar, appreciating by 0.97% from the previous day's close. As a result, throughout November, the Rupiah has strengthened by 3.7% from its position at the end of the previous month at Rp 15,203 per US dollar.

The upcoming US Senate and Congressional elections, expected to be closely contested between the Republican and Democratic parties, are contributing to the weakening of the US dollar against major world currencies. The US dollar index on Tuesday, November 7th, fell by 1.14% to 96.02 from its position at the end of the previous month at 97.13. In addition, the implementation of the domestic Non-Deliverable Forward (NDF) and continued economic growth of 5% are encouraging inflows of foreign funds into the Indonesian financial market.

(Read Databoks: Pressure on Rupiah Eases, BI Maintains Reference Interest Rate at 5.75%)