US Economic Data Series are Positive, Rupiah Has the Potential to Strengthen

JAKARTA - The rupiah exchange rate on Wednesday, October 16, 2024, is expected to strengthen against the United States (US) dollar.

Quoting Bloomberg, the rupiah exchange rate on Tuesday, October 15, 2024, the rupiah exchange rate on the spot market closed down 0.15 percent at IDR 15,588 per US dollar.

Meanwhile, the rupiah exchange rate at Bank Indonesia's (BI) Jakarta Interbank Spot Dollar Rate (Jisdor) closed up 0.16 percent to IDR 15,555 per US dollar.

Director of PT Laba Forexindo Berjangka Ibrahim Assuaibi said a series of US data showed that the economy remained resilient and only slowed slightly, while inflation in September rose slightly higher than expected, causing traders to cut speculation about a major interest rate cut from the Fed.

In addition, in the Middle East, Israel expanded its targets in the war against Hezbollah militants in Lebanon on Monday, killing at least 21 people in an airstrike in the north.

Ibrahim said that weak economic readings from China also hurt sentiment towards the country.

Data on Monday showed the country's trade balance grew less than expected as export growth slowed sharply.

"Previous data showed that China's disinflation is still ongoing. In addition, the announcement of new fiscal stimulus measures from Beijing also provided only brief support, given that the government made investors want some important details," he said in his statement quoted on Wednesday, October 16.

From the domestic side, as expected, Indonesia's trade balance has maintained a surplus trend for 53 consecutive months.

The Central Statistics Agency (BPS) reported that the September 2024 trade balance surplus was worth 3.26 billion US dollars.

With this realization, Indonesia's trade balance has continued to maintain a surplus trend since May 2020. Exports as of September 2024 were recorded at 22.08 billion US dollars, with a smaller import value so that the surplus is maintained.

The total import value reached 18.82 billion US dollars or decreased by 8.91 percent from August 2024.

Indonesia's trade balance surplus as of September 2024 was recorded to have increased by 0.48 billion US dollars on a monthly basis.

The surplus was higher than August 2024 of 2.89 billion US dollars, but smaller than the position in September 2023 of 3.41 billion US dollars.

In September 2024, the goods trade balance recorded a surplus of 3.26 billion US dollars or increased by 0.48 billion US dollars on a monthly basis.

The commodities that contributed the main surplus were mineral fuels (HS 27), animal and vegetable fats and oils (HS 15), and iron and steel (HS 72).

Indonesia's Trade Balance Surplus Projected at 2.9 Billion US Dollars Cumulatively or throughout the period of January-September 2024, exports were recorded at 192.85 billion US dollars and imports at 170.87 billion US dollars, so that Indonesia's goods trade balance surplus for the period January-September 2024 reached 21.98 billion US dollars.

Ibrahim estimated that the rupiah would fluctuate but close stronger in trading on Wednesday, October 16, 2024 in the price range of IDR 15,530 - IDR 15,630 per US dollar.