Jakarta (Indonesia Window) – Foreign capital inflows into domestic financial markets were recorded at 1.5 billion U.S. dollars from the second quarter of 2022 to June 21, 2022, according to a report by Bank Indonesia (BI).
“Foreign capitals are coming in amid increasing uncertainty in global financial markets,” BI Governor Perry Warjiyo told a press conference following the BI Board of Governors Meeting in Jakarta on Thursday (June 23).
Despite the inflows of foreign capitals, the rupiah exchange rate experiences increasing pressure which also affects other regional currencies amidst growing uncertainty in global financial markets.
Perry said that the rupiah exchange rate on June 22, 2022 depreciated 1.93 percent compared to the end of May 2022, in line with increasing global financial market uncertainty due to more aggressive monetary policy tightening in various countries in response to increasing inflationary pressures and concerns about a global economic slowdown.
Meanwhile, the supply of domestic foreign exchange (forex) was maintained and perceptions of the outlook for the Indonesian economy remained positive.
With this development, the rupiah exchange rate until June 22, 2022 has depreciated by around 4.14 percent compared to the level at the end of 2021.
Nevertheless, Perry assessed that the depreciation of the rupiah exchange rate was relatively better than that of the currencies of several other developing countries, such as India which decreased by 5.17 percent, Malaysia 5.44 percent, and Thailand 5.84 percent.
“In the future, BI will continue to monitor the development of foreign exchange supply and strengthen the rupiah exchange rate stabilization policy in accordance with the operation of market mechanism and its fundamental values to support efforts to control inflation and macroeconomic stability,” the BI governor said.
Reporting by Indonesia Window