2016, Rupiah Records Second-Strongest Gain in Asia

Solid macroeconomic fundamentals supported the Indonesian Rupiah's strengthening against the US dollar throughout 2016. At the end of 2016, the Rupiah closed at Rp 13,473 per US dollar, representing a 2.3 percent appreciation from its year-end position in 2015. This appreciation was the second-largest after the Japanese Yen, which gained 2.89 percent throughout 2016.

Improvements in Indonesia's trade and current account balances, along with maintained financial stability following Donald Trump's election as US President, supported the Rupiah's movement. Foreign exchange reserves reaching US$ 111.46 billion, inflation remaining at 3.58 percent (YoY), and continued economic growth of around 5 percent enabled the Rupiah to strengthen against the US dollar for the first time since 2011.

Several other Asian currencies, such as the Chinese Yuan, Malaysian Ringgit, Philippine Peso, Indian Rupee, and Singapore Dollar, depreciated against the US dollar. Donald Trump's election and concerns about a Federal Reserve interest rate hike made the US dollar relatively strong against major world currencies and regional currencies. The US dollar index against six major world currencies even reached 103.3 on December 28, 2016.