Bank Indonesia closed Rupiah exchange rate transactions at Rp. 14,632 against the US Dollar during trading Thursday, May 4, 2023. This indicated 74 points or 0.5% strengthening per the previous trading day. This fluctuation has also become the success of Bank Indonesia.

Bank Indonesia is closely monitored by Bank Indonesia, including Yen, Yuan, Singapore Dollar, South Korean Won, Malaysian Ringgit, and Hong Kong Dollar. The Rupiah is considered relatively strong among the major currencies and closing at 14,632 is entirely satisfactory.

In Asia, most currencies have strengthened against the US dollar. The Korean won recorded the highest increase, namely 0.41%. The Malaysian Ringgit was up 0.39%, and the Thai Baht was up 0.39%. Meanwhile, the Hong Kong dollar weakened against the USD until market close.

And from the movement to this day, the Rupiah is strong against the US dollar. The strengthening movement for three consecutive days and breaking a strong level will help the Rupiah to break the most vital record in 1 year, including due to high volatility.

Rupiah Ready to Break the Strongest Record in 2023, Dedollarization Strategy Is the Key?

The Rupiah has been strengthening recently against the US dollar. The Rupiah has successfully maintained for three consecutive days and is considered to have the potential to break the 2023 most substantial record at IDR 15,620 per US dollar.

According to data from Refinitiv, the strengthening stems from the recent de-dollarization strategy. The Rupiah also has the opportunity to break the most substantial record in 2023 because it sees high volatility.

Sentiment towards domestic and foreign trade also influences the movement of the Rupiah. The main focus of Bank Indonesia is to maintain the stability of the Rupiah.

Technically, the Rupiah is far from the mobbing average of 50. The strengthening of the Rupiah has accelerated after reaching overbought and oversold areas. Indonesia's economic growth is one reason the Rupiah broke its most vital record in 2023.

Commodities have helped post-pandemic recovery, and analysts expect economic momentum to cool as commodity prices ease. Monetary policy tightening around the optimal zone, including interest rate hikes between August and January totaling 225 basis points.

The central bank estimates Indonesia's economic growth will be at the upper end. The crucial sector recorded a faster year-on-year increase in the first quarter. And the impact of Bank Indonesia's tightening on-demand shows that the economy and the Rupiah remained strong.

Indonesia Q1 GDP Above Forecasts Despite High Inflation and Slow Global Trade

Indonesia's economy grew faster than expected in the first quarter. Consumer and government spending offset a slowdown. Gross Domestic Product expanded more than expected.

Although analysts expect economic momentum to cool in recent months. Bank Indonesia's monetary tightening, including in the interest rate hike sector, is already high and could hit domestic demand.

Our economic prospects in the future remain relatively strong.Export growth, which was softened in the first quarter, proves that Indonesia's economy needs a stimulant.

Chief Economics Minister Airlangga Hartarto said: "Our economist perspective going forward remains quite strong. It notes high consumer confidence and purchasing managers' indexes, as well as easing inflation,"

If you look at recent inflation data, it peaked at 5.95% in September. It has eased to just above Bank Indonesia's 2% to 4% target range for April. The Rupiah emerged as Asia's best-performing currency because it was firming 6 percent against the USD.

Nonetheless, Indonesia's economic growth prospects look relatively upbeat, the inflation in a closer range. Easing price pressure can boost further spending. A stable currency and potential central bank easing can be adjusted for full-year growth from the Rupiah.

The Indonesian economy is in a good zone, and all the policies taken by Bank Indonesia are fruitful. A stable currency and potential bank easing will allow Bank Indonesia to make the Rupiah penetrate the most substantial record in 2023 shortly.