Rupiah Wednesday Potentially Continues Weakening, Here's The Sentiment

Illustration. (Photo: Doc. Antara)

JAKARTA - The rupiah exchange rate in trading Wednesday, March 27, 2024, is expected to continue to weaken the United States (US) dollar.

Quoting Bloomberg, the Rupiah exchange rate on Tuesday, March 26, the rupiah spot exchange closed higher by 0.04 percent Rp15,793 per US dollar. Meanwhile, the Jakarta Interbank Spot Dollar Rate (Jisdor) exchange rate of Bank Indonesia (BI) closed slightly lower by 0.01 percent to a price level of Rp15,795 per US dollar.

Director of PT Profit Forexindo Berjangka Ibrahim Assuaibi said the Fed did mark the possibility of a 75 basis point decline in interest rates this year, but added that this would depend heavily on inflation.

"This makes the release of the core private consumption expenditure price index, which is a measure of basic inflation that the Fed likes, the focus of attention, although this will be released when the market closes on Good Friday," he said in a statement quoted Wednesday, March 27.

Ibrahim said in addition, there are a number of Fed officials who will speak this week including Fed Chair Jerome Powell, Fed Atlanta president Raphael Bostic and Fed governor Lisa Cook and Christopher Waller.

According to Ibrahim, their comments will also be carefully studied as markets seek clues regarding the direction of interest rate policy, including the possibility of the central bank starting to lower interest rates in June.

In addition, a bet of lower interest rates in June by the European Central Bank and the Bank of England has increased substantially after the Swiss National Bank became the first major central bank to lower loan costs last week.

From an internal point of view, the market responds positively to Indonesia's economic prospects, which are expected to remain strong in line with Indonesia's Sovereign Credit Rating which is maintained at BBB+ with a stable outlook by the Japan Credit Rating Agency, Ltd. (JCR).

Meanwhile, this decision considers the prospect of strong economic growth and controlled government debt.

JCR also estimates that the government's debt will decline gradually in line with improving economic growth and the government's fiscal deficit.

With the affirmation of Indonesia's rating, international stakeholders still have a strong confidence in maintaining macroeconomic and financial system stability in Indonesia. This is supported by the credibility of policies and the synergy of the strong policy mix between Bank Indonesia and the Government.

In the future, BI will continue to pay close attention to global and domestic economic and financial developments, as well as formulate and implement the necessary steps to ensure macroeconomic and financial system stability is maintained.

Ibrahim estimates that the rupiah will fluctuate but closed lower on trading Wednesday, March 27 in the price range of IDR 15,780 - IDR 15,850 per US dollar.