Economist: Global Economic Uncertainty Encourages Flow Of Funds To Safe-Haven Assets

Illustration. (Photo: Doc. Antara)

JAKARTA - Economists assess the uncertainty of the global economy driving the flow of funds to safe-haven assets such as the US dollar and gold so as to have an impact on the current volatility of the rupiah. "The uncertainty of the global economy is driving the flow of funds to safe-haven assets. The weakening of the global economy and the increasing geopolitical tension force market participants to place their funds on instruments that are considered safe (safe haven), such as US dollars and gold commodities," said Bank Mandiri Economist Reny Eka Putri, quoted from Antara, Wednesday, April 3. To mitigate external volatility, Bank Indonesia (BI) will continue triple intervention, twist operations, implementation of Export Result Foreign Exchange (DHE), and the auction of the latest instruments to maintain financial market stability and absorb capital flows.

The instruments include Rupiah Bank Indonesia Securities (SRBI) and Bank Indonesia Securities (SVBI), as well as Sukuk Valas Bank Indonesia (SUVBI).

Sejak awal 2024 sampai dengan 27 Maret 2024, total modal asing keluar bersih di pasar surat berharga negara (SBN) mencapai Rp33,31 triliun, sementara modal asing masuk bersih di pasar saham dan SRBI masing-masing sebesar Rp28,90 triliun dan Rp20,05 triliun.Reny menuturkan data perekonomian, kondisi perekonomian global, ekspektasi inflasi, dan kebijakan moneter merupakan faktor penentu utama yang dapat mengarahkan bank sentral untuk menerapkan penurunan suku bunga.Saat ini, peningkatan permintaan dolar AS juga didorong oleh berbagai data perekonomian AS yang menunjukkan perbaikan, yang mana produk domestik bruto (PDB) AS pada kuartal IV-2023 direvisi naik menjadi 3,4 persen secara kuartal atau quarter on quarter (qoq) dari sebelumnya 3,2 persen (qoq).

According to him, the policy interest rate of the United States (US) or the Fed Funds Rate has the potential to drop the fastest in the second half of 2024. Likewise, the potential for a reduction in the BI or BI-Rate benchmark interest rate will only occur in the second half of this year. Assuming that the policy of the US central bank or the Fed will reduce the Fed Funds Rate to 5 percent and the potential for capital flow back to the domestic market, Reny estimates that the rupiah exchange rate can reach the range of Rp. 15,400 to Rp. 15,600 per US dollar and benchmark yields of domestic bonds in the range of 6.4 percent to 6.5 percent by the end of 2024.