JAKARTA - The rupiah exchange rate in trading Monday, May 13, 2024 is expected to move higher against the United States (US) dollar.
Quoting Bloomberg, the Rupiah exchange rate on Wednesday, May 8, 2024, the rupiah spot exchange rate closed down 0.01 percent to the level of Rp. 16,047 per US dollar. Similarly, the Jakarta Interbank Spot Dollar Rate (Jisdor) exchange rate of Bank Indonesia (BI) closed down 0.16 percent to a price level of Rp. 16,081 per US dollar.
Director of PT Profit Forexindo Berjangka Ibrahim Assuaibi conveyed that market expectations for the two-time decline in interest rates this year have increased, with the expectation of a decline of at least 25 basis points in September currently at 64.5 percent, according to FedWatch Tool CME.
"With the quiet economic calendar this week, highlighted by the reading of consumer sentiment from the University of Michigan on Friday, a number of Fed officials will deliver their speeches, including Fed Governor Lisa Cook and Michelle totaling at the end of this week," he explained in his official statement, quoted Monday, May 13.
In addition, Japanese major currency diplomat Masato Kanda said his country may have to take action against speculative irregular foreign exchange movements, signaling the Bank of Japan remains ready to intervene in the market after two alleged interventions worth nearly 60 billion US dollars last week.
From an internal point of view, Bank Indonesia (BI) noted that Indonesia's foreign exchange reserves (cadev) had decreased. At the end of April 2024, Indonesia's foreign exchange reserves amounted to 136.2 billion US dollars or decreased compared to the position at the end of March 2024 of 140.4 billion US dollars.
The decline in the position of foreign exchange reserves was influenced, among others, by the payment of government foreign debt and the need for stabilization of the rupiah exchange rate in line with the increasing uncertainty in the global financial market.
The position of foreign exchange reserves is equivalent to financing 6.1 months of imports or 6.0 months of imports and payment of government foreign debt, and is above the international adequacy standard of about 3 months of imports.
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BI assesses that foreign exchange reserves are able to support the resilience of the external sector and maintain macroeconomic and financial system stability. In the future, BI views foreign exchange reserves as adequate, supported by stability and maintained national economic prospects.
This is in line with the synergy of policy mix responses taken by BI and the government in maintaining macroeconomic and financial system stability to support sustainable economic growth.
Ibrahim estimates that the rupiah will fluctuate but close higher in trading Monday, May 13, 2024, in the price range of IDR 15,990 - IDR 16,070 per US dollar.
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