Market Awaits Fed's Decision, Rupiah Is Estimated To Move Stable

JAKARTA - President Commissioner of HFX International Futures Sutopo Widodo said that for Thursday's trading, August 14, the movement of the rupiah is expected to rely heavily on global developments, especially signals related to the direction of the Federal Reserve's monetary policy.

According to him, any indication that strengthens or weakens expectations that cut interest rates will have a direct impact on the movement of the US dollar, and ultimately affect the rupiah exchange rate.

"In addition, overall market sentiment towards risky assets (risk-on or risk-off) will also be a determining factor," he told VOI, Thursday, August 14.

Sutopo stated that the decline in the US dollar index was the main factor in strengthening the rupiah exchange rate on Wednesday, August 13.

According to him, with US inflation data released lower than expected, it triggered market expectations of a possible decline in interest rates by the Federal Reserve in September.

"This sentiment weakens the US dollar globally, providing space for currencies such as rupiah to strengthen," he said.

In addition, he said that negative sentiment towards the US dollar was also influenced by concerns over the independence of the Federal Reserve, following a statement from the White House regarding possible legal action against Fed Chairman Jerome Powell.

He conveyed that taking into account the above sentiment, the movement of the rupiah in trading Thursday, August 14 is expected to be in a range that tends to be stable.

Sutopo said that based on the strengthening that occurred on Wednesday, August 13 and supporting global sentiment, the rupiah exchange rate is estimated against the US dollar on Thursday, August 14th, which will move in the range of Rp. 16,150 per US dollar to Rp. 16,250 per US dollar.

However, he said that it is still necessary to be aware that the movement of the rupiah is very sensitive to the release of important economic data or statements from the global central bank that can suddenly change market sentiment.

To note, citing Bloomberg, the rupiah exchange rate on Wednesday, August 13, the rupiah spot exchange rate closed up 0.54 percent to the level of Rp. 16,202 per US dollar.

Meanwhile, the Jakarta Interbank Spot Dollar Rate (Jisdor) exchange rate of Bank Indonesia (BI) closed up 0.37 percent to a price level of IDR 16,237 per US dollar.