Jakarta, CNBC Indonesia – The exchange rate of the rupiah against the United States dollar (US) managed to gain ground in the spot market trading. Finally the rupiah strengthened after days of sluggishness.
On Tuesday (9/15/2020), US $ 1 was priced at Rp. 14,800 when the spot market opened. Rupiah strengthened 0.4% compared to the previous day’s closing position.
Yesterday, the rupiah closed spot market trading at Rp14,860 / US $, exactly the same as last weekend’s closing position, aka stagnant. This made the rupiah never strengthen for five consecutive trading days. Within these five days, the depreciation of the rupiah reached 0.88%. The deep enough rupiah depreciation gave him the opportunity to record technical rebound.
Rupiah depreciation occurred when the US dollar was actually weakening. In the last week, the Dollar Index (which reflects the position greenback in front of the six major world currencies) was corrected by 0.39%.
So, it seems that domestic sentiment is making the rupiah depressed. Two weeks ago, the market was shocked by the dynamics of the relationship between the government and Bank Indonesia (BI).
To secure increased budget financing due to the handling of the corona virus pandemic (Coronavirus Disease-2019/ Covid-19), BI was asked to enter to buy government bonds in the primary market. This year, BI is the buyer of Government Securities (SBN) to fulfill budgetary needs for the public interest (public goods) worth nearly IDR 400 trillion. Meanwhile, until 2022, BI is expected to remain a standby buyer (standby buyer) SBN in accordance with Law No. 2/2020.