Rupiah Potentially Strengthens Driven By Weakening Of US Manufacturing And Services Data

JAKARTA - The rupiah exchange rate in trading Wednesday, September 25, 2024 is expected to move higher against the United States (US) dollar.

Quoting Bloomberg, the Rupiah exchange rate on Tuesday, September 24, 2024, the rupiah exchange rate in the spot market closed up 0.13 percent at the level of Rp15,187 per US dollar. Meanwhile, the Jakarta Interbank Spot Dollar Rate (Jisdor) exchange rate of Bank Indonesia (BI) closed higher by 0.03 percent to a price level of Rp15,186 per US dollar.

Director of PT. Laba Forexindo Berjangka Ibrahim Assuaibi said US business activities were stable in September, but the average price charged for goods and services rose at the fastest rate in six months, which may indicate accelerated inflation in the coming months.

"The data comes after the Federal Reserve cut interest rates by 50 basis points last week, with some officials commenting on Monday that the move is meant to maintain a new and healthy balance in the economy," he said in a statement, quoted Wednesday, September 25.

In addition, S&P Global reported the US Joint PMI Output Index, which tracks the manufacturing and service sector to 54.4 this month compared to the final figure of 54.6 in August, though with the reading above 50 signaling expansion.

From a domestic perspective, the Government estimates that economic growth in the third quarter of 2024 will remain stable, due to the cutting of the BI Rate and the Fed Fund Rate (FFR), Indonesia's economic growth will reach 5.06 percent on an annual basis or year on year (YoY).

Meanwhile, this projection tends to be stable from the realization of the second quarter of 2024 which amounted to 5.05 percent (YoY). In the midst of continued dynamic global developments.

Meanwhile, uncertainty or volatility in the financial market is starting to show a decline and getting better. Where capital flows began to enter the stock market and Government Securities (SBN).

Although the direction of monetary policy in developed countries, especially the US shows soft landing, the government will still be aware of geopolitical conditions, including the development of elections in the US which will adopt policy direction.

Meanwhile, the government targets economic growth of 5.2 percent by the end of 2024. Meanwhile, cumulatively, economic growth during the first half was at 5.08 percent.

Previously, Bank Indonesia (BI) saw that along with the start of cutting the benchmark interest rate, the economy was able to grow in the range of 4.7 percent to 5.5 percent, with a middle value of 5.1 percent.

Ibrahim estimates that the rupiah will fluctuate but close higher in trading on Wednesday, September 25, 2024, in the price range of IDR 15,130 - IDR 15,230 per US dollar.