JAKARTA - The rupiah exchange rate in trading Wednesday, July 3, 2024 is expected to weaken against the United States (US) dollar.
Quoting Bloomberg, the Rupiah exchange rate on Tuesday, July 2, 2024, the rupiah exchange rate on the spot market closed down 0.46 percent at the level of Rp. 16,396 per US dollar. Similarly, the Jakarta Interbank Spot Dollar Rate (Jisdor) exchange rate of Bank Indonesia (BI) closed down 0.17 percent to a price level of Rp. 16,384 per US dollar.
Director of PT Profit Forexindo Berjangka Ibrahim Assuaibi said the dollar index was stable against other currencies, after recovering from a recent decline on Monday, with more signs of Fed and US interest rates being released this week.
"The main data for non-farm payroll for June will be released on Friday, and is expected to provide more insight into the labor market, which is also a major consideration for the Fed in cutting interest rates," he said in his statement, quoted Wednesday, July 3.
According to Ibrahim, the US dollar weakened last week as traders raised their stakes on a 25-base-point drop in September.
However, a number of Fed officials stated that the central bank needed more confidence in controlling inflation before cutting interest rates.
From an internal point of view, Ibrahim conveyed that the impact of the decline in the performance of Indonesia's manufacturing Purchasing Manager's Index (PMI), which fell to 50.7 in June 2024, fell from 52.1 in the previous month.
Despite the slowdown in expansion, Ibrahim said that the national manufacturing industry still shows expansive conditions that can be maintained for 34 consecutive months until June 2024.
The government appreciates the efforts of industry players who continue to maintain optimism and productivity in the midst of a global economic condition full of uncertainty. Even the industrial sector is currently entering an alarming condition. Industry players have decreased their optimism for future business developments.
In line with the S&P Global report, national manufacturing lost momentum in June 2024 due to increased output, new demand, and slowing sales, so that Indonesia's manufacturing PMI level last month experienced a deep decline.
This condition affects the industry's confidence in the output conditions for the next 12 months which have not moved from its lowest position in 4 years in May, as well as one of the lowest in record. This is influenced by the decline in orders from abroad which are influenced by market conditions, trade restrictions, as well as unfavorable regulations.
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The regulation in question is Regulation of the Minister of Trade No. 8/2024 concerning Import Policies and Regulations that relax imports of goods from abroad similar to domestically produced products.
Ibrahim conveyed that the regulation on the relaxation of imports in the regulation led to a decline in optimism for industry players, which affected the decline in PMI.
Ibrahim estimates that the rupiah will fluctuate but closed lower in trading on Wednesday, July 3, 2024, in the price range of IDR 16,380 - IDR 16,470 per US dollar.
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