The Rupiah Exchange Rate is Predicted to Weaken Again on Wednesday (17/4)

April 17, 2024, 07.15 AM  | Reporter: Nadya Zahira
The Rupiah Exchange Rate is Predicted to Weaken Again on Wednesday (17/4)

ILUSTRASI. JAKARTA, 02/03-RUPIAH IMPACT BY TRADE WAR. A teller shows dollars at a money changer outlet in Jakarta, Friday (2/3). The statement by the President of the United States (US) Donald Trump regarding the imposition of a 10% tariff on steel imports and a 25% tariff on aluminum imports, caused the US dollar to weaken against the rupiah. Quoting Bloomberg, on Friday (2/3) at 13.40 WIB, the USD/IDR pairing fell 0.21% to IDR 13,777. KONTAN/Fransiskus Simbolon/02/03/2018

CURRENCY - JAKARTA. The Indonesian rupiah weakened against the US dollar in its first trading session following the Eid holiday on Tuesday (16/4).

According to Bloomberg on Tuesday (16/4), the rupiah's exchange rate in the spot market plummeted 2.07% to Rp 16,175 per US dollar, while the US dollar index strengthened by 0.08% to 106.29.

Josua Pardede, Chief Economist at Bank Permata, stated that the rupiah's depreciation was the deepest in the Asian region. The rupiah's exchange rate surpassed the Rp 16,000 per US dollar level for the first time in the last four years.

Pardede explained that the rupiah's depreciation against the US dollar was due to the accumulation of several indicators and events during the long Eid al-Fitr holiday period.

Read Also: Indonesia Intervenes to Stem Rupiah's Slide After Currency Hits 4-Year Low

Moreover, the latest data shows that the US economy remains solid, with annual inflation recorded as increasing, initial jobless claims also decreasing, and retail sales strengthening.

"This indicates a delay in policy rate cuts by The Fed, or what is more commonly known as higher for longer," Pardede told on Tuesday (16/4).

In addition, Pardede stated that the market predicts The Fed will maintain the policy interest rate at its current level until the end of the second quarter of 2024, and will only begin to cut rates in September 2024.

On the other hand, Pardede said, the next sentiment that strengthened the US dollar was the re-escalation of geopolitical conflict in the Middle East after Iran attacked Israel, causing many investors to become risk-off and prefer safe-haven assets like gold, and avoid emerging markets or risky assets.

Then, another sentiment, Pardede said, came from the People's Bank of China or PBoC which today, Tuesday (16/4), signaled to allow the weakening of the Yuan to occur or weakening fixing, thus impacting the financial markets in the Asian region.

"Tomorrow, Wednesday (17/4), we project the rupiah has the potential to continue to weaken in the range of Rp 16,050 per US dollar to Rp 16,250 per US dollar," he concluded.

Next: The Indonesian Government Officially Revises Minister of Trade Regulation 36 of 2023

Editor: Syamsul Azhar

Latest News