Less Market Expectations, Rupiah Projected To Continue Weakening

JAKARTA - The rupiah exchange rate in trading Monday, November 18, 2024 is expected to weaken against the United States (US) dollar.

Quoting Bloomberg, the Rupiah exchange rate on Friday, November 15, 2024, the rupiah exchange rate on the spot market closed down 0.08 percent at the level of Rp15,874 per US dollar. Meanwhile, the Jakarta Interbank Spot Dollar Rate (Jisdor) exchange rate closed lower by 0.09 percent to a price level of Rp15,888 per US dollar.

Director of PT Profit Forexindo Berjangka Ibrahim Assuaibi said the dollar jumped to its highest level in one year amid growing uncertainty over the prospect of short-term interest rates and the market is also unsure about the interest rate prospects behind Trump.

"U.S. consumer and producer inflation was monitored stagnantly for October, while comments from Federal Reserve officials show the central bank is more cautious in cutting interest rates further," Ibrahim said in his statement, quoted Friday, November 15.

Ibrahim conveyed the comments that led traders to reduce expectations for December rate cuts. Traders are seen estimating a 61 percent chance of cutting the 25 basis point interest rate in December, down from the 85.7 percent chance seen on Thursday.

In addition, traders also see a 39 percent chance that interest rates will remain unchanged, the CME Fedwatch shows.

Meanwhile, from within the country, the Central Statistics Agency (BPS) noted that Indonesia's trade balance still recorded a surplus of 2.45 billion US dollars in October 2024. Despite still recording a surplus, Indonesia's trade balance decreased by 0.76 billion US dollars when compared to the previous month which reached 2.23 billion US dollars.

However, Indonesia's trade balance has recorded a surplus for 54 consecutive months since May 2020. Indonesia's trade balance surplus in addition to lower than the previous month, is also lower by 1 billion US dollars when compared to the same period last year.

The surplus conditions in October 2024 were supported by a surplus of non-oil and gas (oil and gas) commodities, of which the main surplus contributors came from mineral fuel commodities (HS 27), as well as vegetable animal fats and oils (HS 15), as well as iron and steel (HS 72).

At the same time, the oil and gas commodity trade balance was recorded at a deficit of US$2.32 billion, with commodities contributing to the deficit coming from commodities produced by oil and crude.

Meanwhile, Indonesia's trade balance in October 2024 was still in surplus due to a higher export value compared to the import value. Indonesia's export value in October 2024 was recorded at 24.41 billion US dollars, or an increase of 10.69 percent mtm when compared to the previous month. Meanwhile, Indonesia's import value was recorded at 21.94 billion US dollars, or an increase of 16.54 percent when compared to the previous month.

Ibrahim estimates that the rupiah will fluctuate but close lower in trading Monday, November 18, 2024, in the price range of IDR 15,860 - IDR 15,940 per US dollar.