This is a normal adjustment [in the rupiah]. A rise in the fund rate is expected in March, so there is already a pressure in February, Mirza Adityaswara, the central banks senior deputy governor, told reporters.

Mirza said the market now expects the US Federal Reserve will increase interest rates three to four times this year following improvements in the US labor market and the subsequent expected increase in inflation and yields of US state bonds.

Mirza believed the rupiahs adjustment will only be temporary and that Indonesia has more than enough foreign exchange reserves to deal with market outflows.

Indonesias foreign exchange reserves in January were valued at $131.98 billion, the highest ever in its recorded history, showing that the country has been more than able to maintain economic stability and stand up to pressures from the global economy.

The deputy governor also said Indonesias private sector has proved to be resilient since around 90 percent of the companies have hedged their foreign currency-denominated debts after Bank Indonesia told them to do so in 2015.

Source : Jakarta Globe

Feb 10, 2018