RI's economic fundamentals are still solid, which is why it is believed that the Rupiah will continue to strengthen against the DollarDollar; that is the essence of what the Governor of Bank Indonesia (BI) Perry Warjiyo, said when discussing the Rupiah exchange rate.

He also said that Indonesia's economic growth rate is expected to remain strong and resistant to the effects of global turmoil in 2023. It is projected that Indonesia's economy will grow in the range of 4.5 percent or 5.3 percent in 2023, and inflation will stabilize.

"The Rupiah exchange rate is guaranteed to be stable and will even tend to strengthen, in line with its financials," said Perry. In this case, he said that monetary policy from Bank Indonesia in 2023 would be focused on maintaining the rupiah exchange rate.

At the BI annual meeting, which was held on Wednesday, November 30, he also gave a response regarding the interest rate policy carried out by BI through calibration. He said that communication would be carried out transparently for a stable exchange rate.

Bank Indonesia sees that the FED is no longer aggressive and will "slaughter" the Dollar

Until last week's closing price, the Rupiah exchange rate strengthened 125 points or 0.80 percent to IDR 15,437 per US dollar. This strengthening was also driven by the stock index, which increased by 0.09 percent.

Interest rates and the strengthening of the US dollar are still very vulnerable. Therefore, Perry stated that the increase in interest rates and the strengthening of the US dollar would continue to be watched out for because of the risk of adding pressure. 

Especially for developing country currencies, one of which is the Rupiah, with a conducive monetary system. Launching more data, Bank Indonesia is said to ensure a strengthening exchange rate despite the turmoil in global financial markets. 

Rupiah exchange rate stability is BI's highest commitment in the global market, and signs of Rupiah strengthening are increasingly visible. In addition, the reason that makes it believed that the Rupiah would strengthen is that the FED is starting to be more conducive.

They won't be raising interest rates by 75 basis points, but only 50 bps, and in the bond market, this is an advantage for the Rupiah. Foreign investors are also starting to enter the country again.

Indonesia's inflation is believed to be lower than the target, as in November, which was only 5.42%, slightly below BI's expectations. This positive sentiment then made Bank Indonesia have no doubts that the Rupiah was on the path of economic development. 

Another factor is because of the FED. At least until the market closes this week, the Rupiah exchange rate has shown the right momentum. Furthermore, this week, the target for the Rupiah is to strengthen again and end the weakening in the early weeks. 

What about the IDR 16,000/US$ forecast? Will it happen soon?

Previously, some said that the consecutive weakening of the Rupiah at the beginning of last week was a disaster for this currency. Rupiah opened trading at IDR 15,720 and immediately fell again. And that immediately made a lot of dire predictions regarding the currency.

According to western media, Bank Indonesia is committed to reducing pressure on the Rupiah. However, due to the risk of corporate play, the Rupiah could fall to 16,000 per DollarDollar. So this is the worst status in Asia, but this is not the case.

Bank Indonesia succeeded in turning the weakness into strengthening. Two days before the market close last week, the Rupiah strengthened again. Luhut even believes that external factors can increase the rupiah exchange rate at a level exceeding Rp. 16,000 per USD.

The FED started to make policies that were not aggressive, which was what Bank Indonesia began to take advantage of. Bank Central Indonesia is committed to bringing a more stable Rupiah exchange rate.