Jakarta, CNBC Indonesia – Bank Indonesia (BI) admits the United States (US) dollar is now scarce. Not only in Indonesia but in the world due to the ongoing high economic uncertainty.
“So what is happening globally now is a shortage of dollars,” Senior Deputy Governor Destry Damayanti said at a press conference at the BI Board of Governors (RDG), Thursday (11/17/2022).
Now central banks around the world are busy raising their key interest rates. The United States (US) is one of them, where the Federal Reserve (the Fed) has raised its benchmark interest rate to 3.75-4%. The increase is expected to continue in the future.
“So when the FFR keeps rising, bond yields in the US are also high,” he explained.
“So this encourages a flow back from several emerging market countries including Indonesia, including developed countries as well as in Europe and so on, back into the United States,” Destry said.
This is reflected in the strengthening of the US dollar in recent times. The US dollar exchange rate index against major currencies (DXY) was recorded at 106.28 on Nov 16, 2022 or strengthened by 11.09% (ytd) during 2022.
“This eventually led to a shortage of dollars in emerging market countries, including developed countries,” he said.
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