Rupiah Is Expected to Move Flat

Illustration (Photo: Doc. Antara)

JAKARTA - The rupiah currency is expected to move sideways or flat on trading Tuesday, November 14.

The sentiment for the movement of the rupiah still comes from the Fed's hawkish tone.

Quoting Bloomberg, the rupiah spot closed slightly lower by 0.04 percent to a price level of IDR 15,701 per US dollar on trading today, Monday, November 13.

Meanwhile, the Jisdor Bank Indonesia (BI) rupiah weakened by 0.13 percent to a level of IDR 15,713 per US dollar.

Bank Permata Chief Economist Josua Pardede said that the rupiah in trading on Tuesday, November 14 is expected to have the potential to fluctuate in the range of IDR 15,650-IDR 15,750 per US dollar.

Apart from that, Josua assessed that the movement of the US Dollar Index tended to be stable, after experiencing an increase until it reached around 106 before experiencing resistance and finally closing down 0.19 percent at the level of 105.66.

On the other hand, investors tend to be cautious ahead of the release of US inflation data for October 2023 which is expected to fall from 3.7 percent to 3.3 percent yoy.

Core inflation is estimated to remain stable at 4.1 percent yoy.

"The Fed emphasizes the importance of continuing to monitor inflation trends and economic growth data which currently still tends to be solid in order to see whether or not there is still room for the potential for another increase in the benchmark interest rate," he told VOI, Tuesday.

In last Monday's trading, said Josua, the rupiah closed lower or depreciated limited by 0.03 percent, reaching IDR 15,700 per US dollar.

The rupiah along with regional currencies generally weakened against the US dollar, still influenced by the hawkish statement from the Fed last week.

However, yesterday's depreciation was limited as investors digested the implications of Moody's downgrade of the US credit rating from stable to negative.

Apart from that, investors are also taking a wait-and-see approach, anticipating US inflation data for October 2023. Domestically, investors are also waiting for Indonesian trade data, which is predicted to still show a surplus.

According to Josua, as investors digest the latest economic and market data, and anticipate future information, the majority of SUN yields rose 1-4bps. More specifically, returns for the 5-year, 10-year, 15-year and 20-year benchmark series were recorded at 6.91 percent (4bps), 6.85 percent (0bps), 7.00 respectively. percent (1bps), and 7.06 percent (3bps).

Meanwhile, as of November 8, 2023, foreign ownership in government bonds reached IDR 820.4 trillion, reflecting a net inflow of IDR 10 trillion on an mtd basis or a net inflow of IDR 58.2 trillion on a ytd basis. Foreign ownership was recorded at 14.8 percent of the total outstanding government bonds.

Currency observer Lukman Leong said that the rupiah exchange rate is expected to strengthen against the US dollar in trading, Tuesday, November 14 November.

"This is because US bond yields were corrected by anticipation of US inflation data tonight which is expected to moderate again," he explained.

However, Lukman estimates that the strengthening of the rupiah will still be limited and investors will also anticipate data on Indonesia's trade balance which is expected to return to a surplus even though exports and imports are expected to fall again.

According to Lukman, the rupiah will trade in the price range of IDR 15,650 - IDR 15,750 per US dollar in trading on Tuesday, November 14.