Darmin: rupiah gains as foreign capital flows in

"Fund owners consider investment in Indonesia promising, so the money comes in here (Indonesia). If it comes in here, our rupiah will strengthen," said Darmin in Jakarta on Friday.

Darmin said that the capital inflow into Indonesia occurred because of the trend of negative interest rates in the European Union and Japan, and economic weakness in developing countries such as China.

Foreign investors, he continued, want to redirect their funds to Indonesia because the national economy is currently in good condition at an adequate key interest rate, although it is still relatively high.

According to Darmin, the government has prepared various steps so that funds remain in Indonesia, although a capital reversal may occur later. However, he predicted that the possibility of a capital reversal would not disturb rupiah performance too much.

"We will certainly take care of it by continuing the steps that we have done so far. But I believe this is not like in the past, when the US wanted to increase its interest rate, the atmosphere was already in turmoil," he said.

Previously, the rupiah exchange rate traded interbank in Jakarta on Friday afternoon had strengthened by 89 points to Rp13,143 compared to the previous position at Rp13,232 per US dollar.

"The rupiah currency is continuing to strengthen in line with the weakening of the US dollar in the Asian region due to the global crude oil price trend that is strengthening. This external sentiment is maintaining the pace of the domestic currency," said Samuel Sekuritas Economist Rangga Cipta.

It was observed that the price of WTI Crude crude oil on Friday afternoon was at the US$34.48 per barrel level. Meanwhile, Brent Crude crude oil was at US$36.88 per barrel.

Rangga added that the negative pace of the US dollar also followed sentiment from US non-manufacturing sector data, which had declined following the manufacturing sector index. US non-manufacturing activity declined to 53.4 in February from 53.5 in January.

Editor: B Kunto Wibisono

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