The Rupiah Is Predicted To Weaken Again Ahead Of US Economic Data

Rupiah exchange rate (Photo: dock. Antara)

JAKARTA - The rupiah exchange rate in trading Friday, January 26, 2024 is expected to move fluctuating again but closed lower against the United States (US) dollar ahead of the release of data on US Gross Domestic Product (GDP).

Quoting Bloomberg, the Rupiah exchange rate on Thursday, January 25, the rupiah spot exchange rate was closed lower by 0.72 percent Rp15,826 per US dollar. Meanwhile, Jisdor's rupiah exchange rate closed lower by 0.30 percent to a price level of Rp15,767 per US dollar.

Director of PT Profit Forexindo Berjangka Ibrahim Assuaibi said the market focus was turning to the main data for the fourth quarter of GDP which will be released on Thursday, which is expected to show a decline in growth. But the US economy is also expected to remain superior to developed countries.

"PCE price index data, the Fed's preferred inflation gauge will be released on Friday, and will likely show inflation remains stable in December," he said in a statement quoted Friday, January 26.

Ibrahim conveyed that the resilience of the US economy and high inflation provided the Fed with more space to maintain higher interest rates over a longer period of time a warning voiced by some Fed officials in early January.

According to Ibrahim coupled with strong inflation and labor market reading, traders continue to speculate that the Fed will start lowering interest rates no later than March 2024.

From an internal perspective, the Ministry of Investment/Investment Coordinating Agency (BKPM) noted that Indonesia's investment realization in the fourth quarter of 2023 was IDR 365.8 trillion, growing 16.2 percent yoy. With employment as many as 457,895 people.

Ibrahim said that the investment realization consisted of Foreign Investment (PMA) reaching IDR 184.4 trillion or 50.4 percent of the total investment in the fourth quarter of 2023. This realization rose 5.3 percent compared to the same period the previous year.

Furthermore, the realization of Domestic Investment (PMDN) amounted to Rp181.4 trillion or 49.6 percent of the total investment in the fourth quarter of 2023. This figure increased by 29.9 percent compared to the previous year. Meanwhile, investment between Java Island and outside Java is balanced.

In detail, outside Java has an investment portion of 50.6 percent or equivalent to Rp. 185 trillion in the fourth quarter of 2023. This figure is up 12.7 percent on an annual basis (yoy).

Meanwhile, investment in Java is IDR 180.8 trillion, growing 20.1 percent yoy. This realization is equivalent to 49.4 percent of the total investment in the fourth quarter of 2023.

Based on its location, West Java is the province with the most PMA and PMDN, which is IDR 57.4 trillion. Then, followed by East Java of IDR 45 trillion, DKI Jakarta of IDR 36.4 trillion, Central Sulawesi of IDR 28.4 trillion, and Banten of IDR 25.2 trillion.

Ibrahim estimates that the rupiah will fluctuate but closed lower on Friday, January 26 trading in the price range of IDR 15,810- IDR 15,880 per US dollar.