US Inflation Data Effect Slopes, Today's Rupiah Has The Potential To Strengthen

Illustration. (Photo: Doc. Antara)

JAKARTA - The rupiah exchange rate in trading Monday, July 1, is expected to move higher against the United States (US) dollar.

Quoting Bloomberg, the Rupiah exchange rate on Friday, June 28, 2024, the rupiah exchange rate in the spot market closed slightly higher by 0.19 percent at the level of Rp. 16,375 per US dollar. Similarly, the Jakarta Interbank Spot Dollar Rate (Jisdor) exchange rate of Bank Indonesia (BI) closed up 0.16 percent to a price level of Rp. 16,394 per US dollar.

Director of PT Profit Forexindo Berjangka Ibrahim Assuaibi said the US dollar was slightly affected by the latest data showing a decline in the US economy, especially the labor market. Uncertainty regarding when and how much the Fed will lower interest rates will keep the flow of funds to the dollar strong.

"In addition, various inflationary data from the Japanese capital provide little support for the currency, as well as repeated warnings from the government," he said in his statement, quoted Monday, July 1.

From an internal perspective, the market responded positively to the Ministry of Finance (Kemenkeu) noting that the realization of social assistance expenditures (bansos) until May 2024 was worth IDR 70.5 trillion. The budget was up 12.7 percent on an annual basis (yoy), compared to last year's IDR 62.5 trillion.

The increase in the realization of social assistance spending was mainly influenced by the distribution of basic food card social assistance for two months at a time.

The use of social assistance spending is carried out by the Ministry of Social Affairs (Kemensos) amounting to IDR 37.4 trillion. Among them are used for the distribution of the Family Hope Program (PKH) for 10 million Beneficiary Families (KPM), and Basic Food Cards for 18.7 million KPM.

In addition, the Ministry of Health (Kemenkes) is IDR 19.3 trillion. Mainly to help families and individuals who cannot afford as many as 96.8 million participants from BPJS Kesehatan.

Then, the Ministry of Education, Culture, Research and Technology (Kemendikbud, Research and Technology) amounted to IDR 11.9 trillion. This social assistance is for the assistance of the Indonesia PINTAR Program (PIP) to 8.8 million students, and KIP Lectures for 766.7 thousand students.

Meanwhile, the Ministry of Religion is IDR 1.6 trillion in the form of PIP and KIP. For religious-based schools as many as 1.5 million for PIP students and 47,000 students for KIP Lectures. Meanwhile, social assistance assistance due to the area or community experiencing natural disasters is Rp100 billion that has been disbursed.

Ibrahim estimates that the rupiah will fluctuate but close higher in trading Monday, July 1, 2024, in the price range of IDR 16,320 - IDR 16,410 per US dollar.