BI Rate and Stability of Rupiah

Nowadays, there are many factors that make our financial market more fluctuate than before. Stock price has decreased and rupiah has depreciated. One intervention that Bank of Indonesia already done is increasing BI rate. The most trigger why Bank of Indonesia increasing BI rate is because Fed will increase their rate soon which was implicit said on May, 2 2018. On May, 17 2018, BI rate has increased 25 basis point or 0.25% from 4.25%-4.5%.
Let’s see the development of BI rate (Source: BI) starting 2016 – this year:
April 21, 2016 5.5%
August 19, 2016 5.25%
July 20, 2017 4.75%
Sept 22, 2017 4.25%
May 17, 2018 4.5%
By increasing BI rate, we hope it can be a tool to strengthen our Rupiah. The average of our exchange rate in April 2018 is Rp.13.802,00 per dollar and on May, 16 2018 it became Rp.14.094,00 per dollar. Starting from January 2018, Rupiah has weaken about 3.44% (Source: JISDOR).
The question is why this kind of things can happened. There are many ways to solve this problem like increasing our export so it can increase the supply of currency and be patient until this June. Dividend season will finish in June so it can strengthen our Rupiah. So, eventually that’s the challenge for the government and the investor. Let’s discuss on your own and see you on my next perspective~~~

Marla Setiawati
LIFE LONG LEARNER ~instagram: patriciamarla~
https://seekersecurities.wixsite.com/mb5011

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