Bung BI-Rate Tribe Rises, Rupiah Movement Potentially Strengthens

JAKARTA - The rupiah exchange rate in trading Thursday, April 25, 2024 is expected to continue strengthening the United States (US) dollar.

Quoting Bloomberg, the Rupiah exchange rate on Wednesday, April 24, 2024, the rupiah spot exchange rate closed higher by 0.40 percent to the level of Rp. 16,155 per US dollar. Similarly, the Jakarta Interbank Spot Dollar Rate (Jisdor) of Bank Indonesia (BI) closed higher by 0.51 percent to a price level of Rp. 16,161 per US dollar.

Director of PT.Laba Forexindo Berjangka Ibrahim Assuaibi said the dollar index and dollar index futures moved slightly in Asian trade after a sharp decline on Tuesday, as data on the purchase manager index showed an unexpected weakening in US business activities.

However, Ibrahim said the dollar retains most of its rise so far in April, as traders did not take into account expectations of an early drop in interest rates by the Federal Reserve.

Ibrahim said the focus of the market is now focused on future US economic data, which has the potential to provide more clues regarding interest rates.

"The first quarter of gross domestic product data will be released on Thursday, while PCE price index data for the Fed's preferred inflation gauge will be released on Friday," he explained in his official statement, quoted Thursday, April 25.

According to Ibrahim, recent indicators showing high US inflation caused the market to ignore expectations of lower interest rates in June.

From an internal point of view, the lasar responded positively to the determination by the General Election Commission (KPU) of the Republic of Indonesia that Prabowo Subianto and Gibran Rakabuming Raka (Prabowo-Gibran) as the pair of Presidents and Vice Presidents were elected for the period 2024-2029.

Previously, the Constitutional Court (MK) had announced that it would reject all disputes over the General Election Results (PHPU) filed by the pair of presidential and vice presidential candidates pair 01 and candidate pair 03, namely Anies Baswedan-Muhaimin Iskandar and Ganjar Pranowo-Mahfud MD.

Ibrahim said that his rejection of the lawsuit gave a breath of fresh air to Garuda's currency.

"This has been proven since the Constitutional Court's decision on Monday until today, the rupiah has been monitored consistently for strengthening, although the strengthening has not been below Rp. 16,000," he explained.

Then, according to the prediction of Bank Indonesia (BI) raising the benchmark interest rate or BI Rate at the level of 6.25 percent at the Board of Governors Meeting (RDG) for the period 23-24 April 2024 at the time of the drop in the rupiah exchange rate.

Ibrahim conveyed BI's decision to raise interest rates to strengthen rupiah stability from the possibility of building global risks as well as pre-emptive and forward looking steps to ensure inflation remains on target 2.5 percent plus minus 1 percent by 2024 and 2025.

Ibrahim estimates that the rupiah will fluctuate but close higher in trading Thursday, April 25, 2024 in the price range of Rp. 16,110 - Rp. 16,180 per US dollar.