Ditopang Sentimen Positif Dalam Negeri, Rupiah Berpotensi Menguat

Rupiah and US dollars (Photo: intermediate)

JAKARTA - The rupiah exchange rate in trading Tuesday, July 2, 2024 is expected to move higher against the United States (US) dollar.

Quoting Bloomberg, the Rupiah exchange rate on Monday, July 1, 2024, the rupiah exchange rate on the spot market closed higher by 0.33 percent at the level of Rp. 16,321 per US dollar. Similarly, the Jakarta Interbank Spot Dollar Rate (Jisdor) exchange rate of Bank Indonesia (BI) closed up 0.23 percent to a price level of Rp. 16,355 per US dollar.

Director of PT.Laba Forexindo Berjangka Ibrahim Assuaibi said the data showed the US personal consumption expenditure price index (PCE), the size of the Fed's choice of inflation, did not change last month, and followed an unrevised 0.3 percent increase in April, data showed.

"In 12 months to May, the price index of PCE increased 2.6 percent after rising 2.7 percent in April," he said in his statement, quoted Tuesday, July 2.

Following inflationary data, according to LSEG calculations slightly increased the possibility of easing interest rates in September to around 67 percent, from the previous 65 percent.

The market also estimates that one or two times the interest rate will decrease by 25bps every year this year.

In addition to economic data, market participants are also focused on US politics in line with the inter-attack between the mandate of the US president of the Republican Party, Donald Trump and US President Joe Biden.

From an internal point of view, Indonesia's inflation rate in June 2024 reached 2.51 percent YoY. In June 2024 there was a deflation of 0.08 percent or a decrease in the JCI to 106.28 in June 2024. This deflation occurred in two consecutive months.

As a reminder, Indonesia's inflation rate in May 2024 reached 2.84 percent YoY. This value is lower than April's position of 3 percent. At that time there was a deflation of 0.03 percent in May 2024 on a monthly basis.

President Joko Widodo appreciated the performance and synergy between Bank Indonesia and the Central and Regional Governments in the Inflation Control Team at the Central and Regional Levels (TPIP/TPID) to control inflation, so that inflation is controlled at a target of 2.5 percent plus minus 1 percent according to the target set in 2024.

However, the President reminded to remain vigilant and careful by directly monitoring the movement of food prices in the field given the risk of the impact of global climate change that has the potential to disrupt national food production and can spread to rising inflation.

Meanwhile, to strengthen future inflation control. The government must strengthen food production through optimizing the use of irrigation infrastructure to anticipate the impact of climate change, accelerating the application of research-based technology in supporting agricultural digitization (smart agriculture).

Then, encourage investment to increase the added value of agricultural products, update integrated logistics systems and infrastructure to support the smooth distribution and efficiency of supply chains between regions. As well as strengthen synergy and coordination between institutions, at the central and regional levels, to support inflation control efforts.

Ibrahim estimates that the rupiah will fluctuate but close higher in trading Tuesday, July 2, 2024, in the price range of IDR 16,270 - IDR 16,350 per US dollar.