Friday's Rupiah Projected To Strengthen Again

Illustration. (Photo: Doc. Antara)

JAKARTA - The rupiah exchange rate in trading Friday, April 19, 2024 is expected to continue strengthening the United States (US) dollar.

Quoting Bloomberg, the Rupiah exchange rate on Thursday, April 18, 2024, the rupiah spot exchange closed higher by 0.25 percent to the level of Rp. 16,179 per US dollar. Similarly, the Jakarta Interbank Spot Dollar Rate (Jisdor) exchange rate of Bank Indonesia (BI) closed up 0.38 percent to a price level of Rp. 16,177 per US dollar.

Director of PT Profit Forexindo Berjangka Ibrahim Assuaibi said that the CME FedWatch Tool shows the market estimates that the Fed's interest rate cut by 44 basis points this year is much lower than the year's initial estimate of 160 bps, with September being the latest starting point of the easing cycle.

"The traders previously estimated the Fed would start lowering interest rates in June but a series of data including the consumer price index (CPI) and refusal from central bank bankers have changed the expectations," he explained in his official statement, quoted Friday, April 19.

US economic activity increased slightly from late February to early April and companies signaled they expected inflationary pressure to remain stable, the Federal Reserve survey said on Wednesday.

Meanwhile, policymakers at the European Central Bank (ECB) continue to suggest lower interest rates in June on Tuesday as inflation is still on track to drop back to 2 percent next year, although price lines are still bumpy.

From an internal perspective, based on the Bank Indonesia (BI) Retail Sales Survey, retail sales performance in March 2024 is expected to remain strong in line with the increase in community activities during the Ramadan period. and recorded 222.8 or grew 3.5 percent on an annual basis (year-on-year/yoy).

Based on its group, some groups recorded an increase, including the clothing subgroup of 5.9 percent (yoy), the spare parts and accessories group 12.0 percent (yoy), and the fuel of motorized vehicles 13.2 percent (yoy).

On a monthly basis, retail sales are expected to increase with growth of 4.1 percent (mtm) higher than the previous month which grew 1.7 percent (mtm). This is in line with the increase in community activities during the month of Ramadan and the preparation of the National Religious Holidays (HBKN) of Eid al-Fitr, as well as the discount program.

The entire group is in the expansion phase, with the highest growth in the information and communication equipment group of 13 percent (mtm), followed by the clothing subgroup 11.1 percent, and other household appliances 6.1 percent (mtm).

Meanwhile, retail sales performance in the first quarter of 2024 is estimated to grow by 3.7 percent (yoy), higher than the fourth quarter of 2023 which grew 1.6 percent (yoy). The increase was mainly driven by food, beverage and tobacco groups, as well as motor vehicle fuel groups with growth of 5.4 percent (yoy) and 12.9 percent (yoy), respectively.

Ibrahim estimates that the rupiah will fluctuate but close higher on trading Friday, April 19, 2024, in the price range of IDR 16,150 - IDR 16,200 per US dollar.