2017, Rupiah Weakens 12 Percent Against the Euro

It turns out that the Indonesian Rupiah's exchange rate weakened not only against the United States dollar. Global uncertainty, along with the possibility of further interest rate hikes by the US Federal Reserve (The Fed) by the end of 2017, and the decrease in Bank Indonesia's (BI) 7-day Rate, caused the Rupiah to depreciate against other world currencies. The BI interest rate cut reduced the potential real return on investment in Indonesia after accounting for inflation.

Based on BI's mid-rate data, the Rupiah exchange rate on Monday (October 23rd) stood at Rp 15,931.38 per euro, representing a 12.5 percent weakening from its position at the end of 2016, which was Rp 14,161.55 per euro. This weakening of the Rupiah was the most significant compared to other currencies, including the US dollar. The Rupiah also depreciated by 8.84 percent against the Australian dollar, weakened by 8.7 percent against the Thai baht, and by 8.19 percent against the British pound sterling.

Meanwhile, against the US dollar, the Rupiah's exchange rate this year weakened only slightly by 0.74 percent to Rp 15,535 per US dollar compared to its position on December 30, 2016, which was Rp 13,436.