The Weekend Rupiah Is Predicted To Weaken, This Is The Factor

Illustration. (Photo: Doc. Antara)

JAKARTA - The rupiah exchange rate in trading Friday, January 12, 2024, is expected to fluctuate again but closed lower against the United States (US) dollar driven by external and internal data.

Quoting Bloomberg, the Rupiah exchange rate on Thursday, January 11, the rupiah spot exchange rate rose 0.13 percent to Rp15,549 per US dollar.

Meanwhile, Jisdor's rupiah exchange closed down 0.06 percent to a price level of IDR 15,558 per US dollar.

Director of PT Profit Forexindo Berjangka Ibrahim Assuaibi said the Market is now waiting for the main data of the US consumer price index (CPI) for December, which will be released today. Generalized IHK inflation is expected to increase slightly, while core IHK is expected to continue to decline.

"Inflation is expected to remain well above the Fed's annual target of 2 percent, and coupled with signs of recent labor market resilience, it is a bad sign for expectations of early interest rates," he said, quoted Friday, January 12.

However, traders still seem to maintain their expectations of lowering interest rates by 25 basis points in March, although there was a slight cut last week.

The CME Fedwatch tool shows traders expect a 67.1 percent cut in interest rates in March, up from 60.8 percent seen a day ago and 64.7 percent seen last week.

From an internal point of view, the government remains optimistic even though the World Bank or World Bank revises it under the 2024 global economic outlook from 2.6 percent to 2.4 percent.

The signal for the 2024 economic slowdown has basically emerged since 2023, but the figure continues to be revised downwards.

However, the government has anticipated the global slowdown which has the potential to affect the Indonesian economy.

The reason is, until now the disruption from supply of goods, issues of climate change, commodity prices, and monetary tightening have indeed become the main factor in the slowdown in the global economy.

For this reason, in the short term, the government will continue to encourage people's purchasing power by distributing social assistance (bansos) in the form of rice and basic commodities considering that until the third quarter of 2023, gross domestic product (GDP) is still dominated by household consumption.

Meanwhile, aid will start from the first quarter of 2024, not at the end of the year as it will be in 2023.

This is an effort to keep the Indonesian economy according to the government's target at 5.2 percent in 2024.

The World Bank predicts that the Indonesian economy in 2024 and 2025 will be stable at 4.9 percent, lower than the 2023 forecast at 5 percent. With the slowdown in the global economy, export performance is predicted to decline.

Moreover, the World Bank predicts that the economy for Indonesia's main export market share, namely China, will continue to slow down in the past two years.

In 2024 to 4.5 percent, down from the 2023 estimate of 5.2 percent and continuing to decline in 2025 to 4.3 percent.

According to data from the Central Statistics Agency (BPS), Indonesia's cumulative trade balance from January to November 2023 decreased by 16.91 billion US dollars from the same period in 2022.

The trade balance of goods has again experienced a surplus for 43 consecutive months, although lower than the same month last year.

Ibrahim estimates that the rupiah will fluctuate but close lower in trading Friday, January 12 in the price range of Rp15,530- Rp15,600 per US dollar.