Rupiah Potentially Continues Weakening To Rp16,170 US Dollars

Rupiah and US Dollars (Photo: dock. Antara)

JAKARTA - The rupiah exchange rate in trading Wednesday, December 18, 2024 is expected to weaken against the United States (US) dollar.

Quoting Bloomberg, the Rupiah exchange rate on Tuesday, December 17, 2024, the rupiah spot exchange rate closed down 0.62 percent to the level of Rp. 16,100 per US dollar. Meanwhile, the Jakarta Interbank Spot Dollar Rate (Jisdor) of Bank Indonesia (BI) closed down 0.19 percent to a price level of Rp. 16,050 per US dollar.

Director of PT. Laba Forexindo Berjangka Ibrahim Assuaibi estimates that the rupiah will fluctuate but will be closed lower on Wednesday, December 18, 2024 in the price range of IDR 16,080 - IDR 16,170 per US dollar.

He said the market was waiting for interest rate decisions from major central banks later this week, while weak Chinese economic data released the day before eroded risk sentiment.

"In addition to the Fed meeting, the interest rate decisions from Japan and Indonesia will be the focus this week," he said in his statement, quoted Wednesday, December 18.

In addition, Ibrahim said that at this week's Fed meeting, the central bank is expected to cut interest rates by 25 basis points but also marks a slower cut rate for 2025.

"The lower interest rate prospects usually support economic growth. However, uncertainty surrounding the direction of Fed policy in the future has raised market doubts," he explained.

Meanwhile, from within the country, the Government officially announced a fiscal incentive policy package to the public, as compensation for the increase in value added tax or VAT to 12 percent on January 1, 2025. The basic goods/services of the community will still be exempted by VAT. In addition, there are other goods/services that are given incentives even though they are subject to 12 percent VAT.

There are at least 12 fiscal incentives provided by the government for next year. Dozens of these policies are divided into three groups, namely incentives for low-income people, incentives for the middle class, and incentives for MSMEs/industrials.

In addition, Bank Indonesia reported that Foreign Debt (ULN) in October 2024 was recorded at USD423.4 billion or equivalent to IDR 6,774 trillion assuming an exchange rate of IDR 16,000 per US dollar. This figure is down 5.1 billion US dollars, compared to the position of external debt in September 2024 which amounted to 428.5 billion US dollars.

On an annual basis, Indonesia's external debt grew 7.7 percent yoy, down from 8.5 percent in September 2024. The decline came from public and private sector external debt. The government's external debt position in October 2024 was recorded at 201.1 billion US dollars, down from the position in September 2024 which was recorded at 204.1 billion US dollars.

Then, the government's external debt recorded a growth of 8.6 percent yoy. The decline in the position of government external debt comes from the decline in the position of loans and debt securities. The government continues to be committed to maintaining credibility by fulfilling the obligations of principal payments and interest on time, as well as managing prudent and accountable external debt to get the most efficient and optimal financing.