Rupiah Potentially Reaches IDR 16,300 Level, Here's The Sentiment

JAKARTA - The movement of the rupiah exchange rate is estimated to still have the potential to weaken and will reach the level of Rp. 16,300 per US dollar.

Financial Market and Commodity Observer Ariston Tjendra has the potential for the rupiah to still weaken against the US dollar after the Fed's stance last night seemed reluctant to cut its benchmark interest rate and saw that the US inflation rate had yet to go to a target of 2 percent.

"The projection of the Fed released early this morning also shows that the US benchmark interest rate is cut by only 25 basis points in 2024 which means only once," he explained to VOI, Thursday, June 13.

Ariston said this was lower than the estimates circulating in the market twice this year. The Fed's stance could encourage the strengthening of the US dollar again against other exchange rates.

Meanwhile, Director of PT Laba Forexindo Berjangka Ibrahim Assuaibi said the US dollar index was stable near its highest level over the past month, after rebounding in recent sessions.

According to Ibrahim, this is because market participants are anticipating a signal from the Fed meeting which lasted for two days and ended on Wednesday. It is estimated that the US central bank will not change its current benchmark interest rate.

"However, any signal regarding future interest rate decisions will be closely monitored, especially in the midst of speculation about the potential decline in interest rates in September," he explained.

Ibrahim said traders were also aware of the possibility of hawkish attitude from the Fed, amid high inflation and strong labor markets.

"Before the Fed meeting, consumer price index data will also be released on Wednesday, and is expected to show inflation remains stable in May. Trends like this give the Fed more push to keep high interest rates longer," he said.

The movement of the rupiah on Thursday, June 13 has the potential to weaken towards Rp. 16,350 with a potential support in the range of Rp. 16,250.

Meanwhile, Ibrahim estimates that the rupiah will fluctuate but close higher in the price range of Rp. 16,250 - Rp. 16,320 per US dollar.

Quoting Bloomberg, the Rupiah exchange rate on Wednesday, June 12, 2024, the rupiah spot exchange rate was closed slightly by 0.03 percent to the level of Rp. 16,295 per US dollar.

Similarly, the Jakarta Interbank Spot Dollar Rate (Jisdor) exchange rate of Bank Indonesia (BI) closed lower by 0.01 percent to a price level of Rp. 16,297 per US dollar.