Global Financial Markets Will Still Be Influenced by the Fed's Decision

Illustration (Photo: Doc. Antara)

JAKARTA - Bank Mandiri economist Reny Eka Putri said that global financial market movements were influenced by the Fed's decision to keep interest rates stable at 5.5 percent at the FOMC meeting in December 2023.

In addition, the market predicts that the Fed will make three cuts to the Fed Funds Rate to 4.75 percent in 2024.

"This week, market players will be waiting for the release of PCE inflation to determine the catalyst that will be the basis for making decisions on the direction of future interest rates. There will also be final figures for US economic growth in the third quarter of 2023," she explained to VOI, Monday, December 18.

From domestic, Reny said, market players will anticipate the results of the BI Governor's board meeting decision which is predicted to maintain BI7DRRR at the level of 6 percent.

This anticipation is in line with the rupiah exchange rate stabilization policy which BI continues to improve through the issuance of 3 BI instruments, namely SRBI, SVBI and SUVBI to attract fund flows.

Last week, Reny said, in addition to the Fed's less hawkish stance, the continued release of a trade balance surplus was a positive catalyst for the rupiah so that it closed to appreciate against the dollar.

Although on the other hand, there was a decline in bond yields and an increase in the domestic stock market.

"We predict that USD/IDR has the potential to strengthen in the range of IDR 15,475 - IDR 15,545 in today's trading," she explained.