Opened Strongly, Can The RDG Of Bank Indonesia Bring Rupiah To Around IDR 13,000?

JAKARTA - The rupiah exchange rate on the spot market opened higher on trading Thursday, 18 June. The rupiah strengthened 20 points or 0.28 percent to the level of Rp14,063 per US dollar (US).

Monex Investindo Futures Head Researcher, Ariston Tjendra, said that this morning, negative sentiment was seen overshadowing price movements in Asian financial markets.

"The market is still responding negatively to the positive COVID-19 cases which are still on the rise and the second wave cases in a country that has reopened its economy.

In addition, the market also sees regional conflicts that are still heating up in Asia, between North and South Korea, China and India. All these sentiments have the potential to disrupt and suppress the economy.

"Risk assets such as the Asian stock index appear to be weakening, while safe assets such as the price of 10-year US bonds and the yen exchange rate appear to be strengthening," said Ariston.

According to him, the exchange rate of emerging market countries such as the rupiah might be affected by the weakening of the US dollar. But on the other hand, the Fed's sizable stimulus policy and the US government's stimulus plan of US $ 1 trillion for infrastructure could keep the exchange rate from weakening too much against the US dollar because the stimulus increased US dollar liquidity.

"For the rupiah itself, the new normal economy which has just started gives optimism that the Indonesian economy will not be depressed too deeply during the pandemic. This will be able to support the rupiah," said Ariston.

Ariston further said, the market will also pay attention to the Board of Governors Meeting (RDG) today. Analyst consensus is projecting a cut in interest rates of 25 basis points.

"This policy of cutting can be positive for the rupiah because the low interest rate policy can help increase economic activity," he explained.

According to Ariston, the rupiah might end the day with a slight weakening or a slight strengthening against the US dollar. The rupiah has the potential to move in the range of IDR 14,000-14,150 per US dollar.

This morning, the rupiah strengthened along with several other Asian currencies this morning. Apart from the rupiah, the Japanese yen strengthened 0.26 percent, the Indian rupee strengthened 0.05 percent, the Malaysian ringgit strengthened 0.04 percent and the Taiwan dollar strengthened 0.03 percent against the US dollar.

Meanwhile, the majority of other Asian currencies weakened against the US dollar. The Korean won led the weakening of Asian currencies this morning, weakening 0.09 percent against the US dollar.