Waiting Market Signs US Interest Rate Reduction, Rupiah Predicted Weakening

JAKARTA - The rupiah exchange rate in trading Tuesday, November 12, 2024 is expected to weaken against the United States (US) dollar.

Quoting Bloomberg, the Rupiah exchange rate on Monday, November 11, 2024, the rupiah exchange rate on the spot market closed down 0.11 percent at the level of Rp. 15,689 per US dollar. Meanwhile, the Jakarta Interbank Spot Dollar Rate (Jisdor) exchange rate closed lower by 0.03 percent to a price level of Rp. 15,677 per US dollar.

Director of PT Profit Forexindo Berjangka Ibrahim Assuaibi said a number of Fed officials would address this week, including Chairman Jerome Powell on Thursday, so there would be many directives on interest rate prospects.

"Data will also have an effect as US consumer prices will be released on Thursday and core readings above 0.3 percent are expected to further reduce the possibility of easing in December," he said in a statement, quoted Tuesday, November 12.

Ibrahim said all of this was seen as a benefit to the dollar in the long term, although it doesn't look like Trump's policy will actually be implemented.

In addition, a summary of the opinion from the Bank of Japan policy meeting in October showed some members were unsure when to raise interest rates again given market volatility, thereby reducing the possibility of an increase in December.

The decision will not be eased by political uncertainty as Japanese lawmakers will decide on Monday whether Prime Minister Shigeru Ishiba remains a leader after his coalition lost its parliamentary majority late last month.

Meanwhile, from within the country, Ibrahim explained that the results of the Bank Indonesia Consumer survey in October 2024 indicated that consumer confidence in economic conditions was maintained. This is reflected in the October 2024 Consumer Confidence Index (IKK) which is in an optimistic area (>100), which is 121.1.

When compared to September, this IKK experienced a significant slowdown.

IKK September 2024 recorded 123.5. For the record, this is the lowest level since December 2022.

In addition, BI claims that the October IKK at the 121.1 level is still maintained in line with consumer confidence in the current economic conditions and optimism for future economic conditions.

The BI Consumer Survey also noted that in October 2024 consumer confidence was recorded as remaining optimistic in all expenditure categories.

Peningkatan IKK tercatat pada responden dengan pengeluaran Rp1-2 juta. Berdasarkan usia, IKK meningkat pada kelompok usia 20-30 tahun

In this Consumer Survey, the Current Economic Condition Index (IKE) and the October 2024 Consumer Expectation Index (IEK) were recorded at 109.9.9 and 132.4. In October 2024, consumer perceptions of current economic conditions remained strong, reflected in IKE October 2024 of 109.9.9.

Spatially, some cities recorded an increase in IKE, the largest in Banjarmasin City (6.8 points), followed by Ambon (5.2 points) and Manado (3.7 points).

While some other cities recorded a decrease in IKE, especially in the cities of Surabaya (12.9 points), Pontianak (8.3 points), and Padang (7.3 points).

Ibrahim estimates that the rupiah will fluctuate but close lower in trading on Tuesday, November 12, 2024, in the price range of IDR 15,670 - IDR 15,770 per US dollar.