Vulnerable To Global Sentiment, Rupiah Nangkring At Rp16,300 Per US Dollar

JAKARTA - The rupiah exchange rate in the spot market closed up 0.29 percent at the level of Rp. 16,365 per US dollar on Wednesday, June 19.

Similarly, the Jakarta Interbank Spot Dollar Rate (Jisdor) exchange rate of Bank Indonesia (BI) closed higher by 0.03 percent to a price level of IDR 16,368 per US dollar

Commodity analyst and HFX International Commissioner with the Futures Sutopo Widodo said historically, Rupiah reached an all-time high at the level of Rp. 16,800 in June 1998.

"Nevertheless, the rupiah remains vulnerable to weakening, considering the dollar index was still stable at around 105.3 on Wednesday after slumping for two consecutive sessions, with trading volume expected to remain thin as most investors in the US are on vacation," he told VOI, Wednesday, June 19.

Sutopo said on Tuesday the greenback was under pressure as US retail sales data that was weaker than expected strengthened speculation that the Federal Reserve should immediately lower its interest rates.

Additionally, according to Retail sales Sutopo, it increased smaller than expected in May, while the previous month's figure was revised significantly lower, indicating a slowdown in economic activity in the second quarter.

"The market now sees about two-thirds of the possibility that the Fed will begin to relax its policies in September, with about twice the interest rate drop seen this year," he said.

Meanwhile, Bank Indonesia is expected to maintain interest rates unchanged at 6.25 percent at the May 2024 meeting, in line with market expectations.

Sutopo menyampaikan angka ini tetap berada pada rekor tertinggi sejak acuan ini diketikan pada tahun 2016, yang bertujuan untuk memastikan inflasi umum tetap di dalam target 2,5 persen plus minus 1 persen pada tahun 2024 dan 2025, sekaligus menjaga aliran masuk modal asing dan stabilitas nilai tukar Rupiah.

Domestically, Sutopo said the Indonesian economy showed resilience, achieving growth of 5.11 percent in the first quarter of 2024, mainly driven by strong domestic demand despite the high uncertainty in the global financial market.

"The inflation rate fell to 3 percent in April 2024 from the highest level in seven months by 3.05 percent in the previous month," he said.

Meanwhile, Sutopo said Rupiah weakened to its lowest position in 4 years against the US Dollar in April, remaining vulnerable to changes in global risk sentiment over US monetary policy and global conflict.

Sutopo estimates that the rupiah will be traded on Thursday, June 20, 2024, in the range of Rp. 16,350-Rp. 16,450 per US dollar.