Financial Markets Are Fluctuating, Here Are the Recommendations

Illustration of Rupiah (photo: dock. Antara)

JAKARTA - Domestic financial market conditions are still considered quite volatile. This condition is caused by the impact of global economic and financial market turmoil. The Rupiah closed higher against the United States (US) dollar in trading Tuesday, November 28.

Quoting Bloomberg, on Tuesday, November 28, the rupiah on the spot market was observed to have strengthened 0.38 percent to a price level of IDR 15,435 per US dollar. In line with the increase in the spot rupiah, the Jisdor Bank Indonesia (BI) rupiah closed up 0.50 percent to IDR 15,450 per US dollar.

Bank Mandiri economist Reny Eka Putri said that the Fed in the FOMC minutes meeting last week indicated that it would still have room to increase interest rates in the future.

"US inflation is at risk of having difficulty falling to the target in the near future so a policy of increasing interest rates is still needed. Moreover, currently, US core inflation is still at the level of 4 percent as of October 2023," he explained to VOI, Wednesday, November 29.

Apart from that, the US labor market is also considered to be still strong in supporting the economy even though the US unemployment rate rises to 3.9 percent in October 2023.

Reny sees that market players will wait and see for the results of the December 2023 FOMC meeting to find out the certainty of the Fed's interest rate direction and find out the latest Fed Guidance.

According to Reny, fluctuations in the rupiah are influenced by the Fed, which indicates that it will still increase the FFR towards the end of 2023 and capital outflows that are still continuing in the domestic market.

Meanwhile, domestic sentiment and rupiah stability are still maintained by BI policies, including the launch of the latest pro-market instruments, and aimed at deepening the money market.

Reny estimates that in today's trading, the rupiah will move to the range of IDR 15,415 per US dollar - IDR 15,485 per US dollar.