Rupiah Projected To Strengthen, Here's The Sentiment

Illustration (Photo: Doc. Antara)

JAKARTA - The rupiah exchange rate in trading Tuesday, January 30, 2024 is expected to fluctuate again but closed higher against the United States (US) dollar.

Quoting Bloomberg, the Rupiah exchange rate on Monday, January 29, the rupiah spot exchange rate was closed at 0.09 percent Rp15,810 per US dollar.

Meanwhile, Jisdor's rupiah exchange rate closed up 0.02 percent to a price level of IDR 15,825 per US dollar.

Director of PT Profit Forexindo Berjangka Ibrahim Assuaibi said investors are preparing for a series of critical US economic data such as non-farm payroll data for January and important events chaired by the Federal Open Market Committee (FOMC) meeting and the announcement of the Ministry of Finance's refund.

"This latest report will outline the US government's loan requirements for the coming quarter. Data shows the personal consumption expenditure price index (PCE) increased 0.2 percent last month after a 0.1 percent unrevised decline in November." he said in his statement quoted on Tuesday, January 30.

Ibrahim said, in 12 months to December 2023, the PCE price index increased 2.6 percent, matching the unrevised November increase. These figures are in accordance with consensus expectations.

The annual inflation rate is below 3 percent for three consecutive months

Ibrahim also said that after inflation data, the US interest rate market calculated an easing opportunity of around 47 percent at a March meeting, down from a 51 percent probability on Thursday evening, and an 80 percent chance taken into account two weeks ago, according to the LSEG interest rate likelihood app.

The market fully expects a decline in the first interest rate to occur at a meeting in May, with a probability of around 90 percent, down slightly from late Thursday, which was 94 percent. About five interest rates of 25 basis points each have been estimated this year.

From an internal point of view, the Government also guarantees the economy, which remains optimistic that economic growth in 2023 will be able to reach above 5 percent.

Likewise, this year, the Indonesian economy is predicted to be higher and far from the word recession, even though geopolitical turmoil continues to heat up.

Ibrahim said that in the third quarter of 2023 the economy was still below 5 percent, namely 4.94 percent.

However, if you look at a number of indicators, by the end of the year or fourth quarter of 2023 economic growth could reach above 5 percent.

This can be seen from the macroeconomic indicators.

This optimism is reflected in the increasingly sloping inflation rate. In December 2023 inflation was 2.61 percent, in the range of targets set by the government 2.5 percent plus minus 1 percent.

Then, the debt ratio in 2023 will improve in the range of 38.7 percent. This figure is decreasing when compared to 2021 and 2022.

In terms of the trade balance, it also still prints a surplus despite the decline compared to 2022.

This decline occurred, one of which was due to the decline in commodity prices.

"Where the Indonesia trade balance has a surplus of 40 consecutive months, although in 2023 it has decreased compared to 2022 to 36.9 billion US dollars from the previous 54 billion US dollars", he explained.

Ibrahim estimates that the rupiah will fluctuate but close higher on trading Tuesday, January 30 in the price range of Rp. 15,780- Rp. 15,840 per US dollar.