Foreign capital of $1.5 billion flowed into the domestic financial market in the period from the second quarter of 2022 to June 21, 2022, Bank Indonesia (BI) reported.
“Foreign capital is coming in amid increasing uncertainty in global financial markets,” BI Governor Perry Warjiyo noted at a press conference on the June 2022 board of governors’ meeting here on Thursday.
Despite the inflow of foreign capital, the rupiah exchange rate remained under pressure, just like other regional currencies, in line with the increasing uncertainty in global financial markets.
Warjiyo said the rupiah on June 22, 2022, depreciated 1.93 percent against the dollar compared to the end of May 2022, in line with increasing global financial market uncertainty due to more aggressive monetary policy tightening in several countries in response to rising inflationary pressures and concerns about a global economic slowdown.
Meanwhile, the supply of domestic foreign exchange was maintained and perceptions of the outlook for the Indonesian economy remained positive.
With these developments, the rupiah exchange rate as of June 22 depreciated around 4.14 percent compared to the level recorded at the end of 2021.
However, Warjiyo said that the depreciation in the rupiah exchange rate was relatively better compared to the currencies of a number of other developing countries, such as India, whose currency has depreciated 5.17 percent, Malaysia 5.44 percent, and Thailand 5.84 percent.
“BI will continue to monitor developments in the supply of foreign exchange and strengthen the rupiah exchange rate stabilisation policy in accordance with the operation of market mechanisms and its fundamental values to support efforts to control inflation and macroeconomic stability,” the BI Governor added.