BI Holds Reference Interest Rate, Rupiah Closes Strengthens

JAKARTA, KOMPAS.com – The rupiah exchange rate against the US dollar on the spot market strengthened today, Thursday (18/3/2021).

Launch Bloomberg, the rupiah closed up 18 points (0.12 percent) at the level of Rp. 14,410 per US dollar compared to the previous closing of Rp. 14,427 per US dollar.

Director of TFRX Garuda Berjangka Ibrahim Assuaibi said the movement of the rupiah today was driven by the sentiment of Bank Indonesia’s decision to maintain the benchmark interest rate at the level of 3.5 percent.

“Bank Indonesia in this afternoon’s meeting maintained its reference interest rate at 3.5 percent because economic conditions continued to be stable and the handling of Covid-19 was quite progressive so that the decline in Covid-19 patients continued to decline and the economy was again stretching,” Ibrahim said in a statement. Press conference.

Also read: BI Maintains Interest Rates, JCI Raised 1.12 Percent

Ibrahim said that since early last year, Bank Indonesia has cut its benchmark interest rate by 150 basis points (bps). Now, the benchmark interest rate is at its lowest point in history.

The strengthening of the rupiah was also influenced by the US dollar index, which has reached its lowest level in two weeks.

Earlier, in a speech by the Governor of the Fed, Jerome Powell, which muted speculation of a stronger economic outlook, potentially encouraging the central bank to withdraw its stimulus.

“Powell is also signaling not to rush to raise interest rates throughout 2021 even when seeing the speedy recovery taking place in the US,” he said.

In addition, the Bank of Japan (BOJ) is expected to slightly widen the implicit range of around 0 percent long-term interest rates. Meanwhile the Bank of England is expected to keep its benchmark interest rate at a historic low of 0.1 percent and its bond-buying program unchanged.

Also read: Turbulent Global Market, BI Holds Reference Interest Rate

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