Rupiah Expected Weakening Amid Fed's Uncertainty

Illustration (Photo: Doc. Antara)

JAKARTA - The rupiah exchange rate on Friday, November 17, 2023 is expected to weaken slightly again due to strong US retail sales data driving the Fed's uncertainty.

Quoting Bloomberg, the Rupiah exchange rate on Thursday, November 16, the rupiah spot exchange rate fell slightly 0.13 percent to Rp15,555 per US dollar.

Meanwhile, Jisdor's rupiah exchange rate rose 0.59 percent daily to a price level of IDR 15,595 per US dollar.

Director of PT Laba Forexindo Berjangka Ibrahim Assuaibi said strong US retail sales encouraged the Fed's uncertainty.

Data released last night shows that US retail spending will continue until October.

This figure slightly offsets optimism over the recent decline in US inflation, given that it could still pose a huge price pressure in the coming months.

Inflation is still far above the Fed's annual target of 2 percent. Retail sales data pushed the dollar rebound and Treasury yields, which pressed gold and stopped the yellow metal rally for two days.

"October's inflationary data, which is lower than expected, released earlier this week, has increased speculation that the Federal Reserve has finished raising its interest rates," he said in a statement, Friday, November 17.

Bank Indonesia (BI) assessed that Indonesia's Trade Balance surplus in October 2023 strengthened the external resilience of the Indonesian economy further.

Indonesia's trade balance surplus continued in October 2023 at 3.48 billion US dollars, higher than the surplus in September 2023 of 3.41 billion US dollars.

In the future, Bank Indonesia will continue to strengthen policy synergies with the Government and other authorities to continue to increase external resilience and support national economic recovery.

The October 2023 trade balance surplus was sourced mainly from the continued surplus of non-oil and gas trade balance which reached 5.31 billion US dollars, relatively stable compared to the previous month's achievement of 5.33 billion US dollars.

This positive performance is supported by the strong continued export of non-oil and gas, especially coal commodities, precious metal products and jewelry, as well as footwear and steel manufacturing products.

Based on destination countries, non-oil and gas exports to China, the United States, and India remain the main contributors to Indonesia's exports.

Meanwhile, non-oil and gas imports remain strong in line with the continued improvement in economic activity.

Ibrahim estimates that the rupiah will fluctuate but closed lower on Friday, November 17 trading in the price range of IDR 15,530- IDR 15,600 per US dollar.