Global Economy Full Of Uncertainty, Rupiah Potentially Fluctuatingly Tends To Strengthen

Rupiah Dollar (Photo: intermediate)

Global Economy Full Of Uncertainty, Rupiah Potentially Fluctuatingly Tends To Strengthen

JAKARTA - The rupiah exchange rate in trading Thursday, August 22, 2024 is expected to move higher against the United States (US) dollar.

Quoting Bloomberg, the Rupiah exchange rate on Wednesday, August 21, 2024, the rupiah exchange rate on the spot market closed down 0.41 percent at the level of Rp15,500 per US dollar. Meanwhile, the Jakarta Interbank Spot Dollar Rate (Jisdor) exchange rate of Bank Indonesia (BI) closed higher by 0.15 percent to a price level of Rp15,456 per US dollar.

Director of PT Profit Forexindo Berjangka Ibrahim Assuaibi submitted a weak monthly payroll report earlier this month as a catalyst for the surge in volatility across asset classes, making market participants prepare for another potential shock with revised data that will be released on Wednesday.

"Global uncertainty regarding geopolitical tensions and the prospect of global economic growth are still worrying, thus posing a risk to the movement of the rupiah even though Indonesia's domestic economic condition is quite strong," he said in his statement, quoted Wednesday, August 21.

Ibrahim said that the slowdown in the global economy could put pressure on the external sector of Indonesia, thereby increasing the risk of widening the current account balance deficit amid the trend of fiscal deficit expansion.

From a domestic perspective, Bank Indonesia (BI) decided to maintain the benchmark interest rate or BI rate at the level of 6.25 percent in the BI Board of Governors' Meeting (RDG) in August 2024. The decision to maintain the BI rate of 6.25 percent is in line with the focus of prostability monetary policy.

Then, BI set inflation in 2024 to be in the range of 2.5 percent plus minus 1 percent, this policy is also supported by strengthening monetary operations to strengthen the effectiveness of the stabilization of the rupiah exchange rate and the inflow of foreign capital.

Ibrahim conveyed that macroprudential policies and payment systems remain pro-growth to support sustainable economic growth. loose macroprudential policies continue to be pursued to encourage bank credit/financing to the business world and households.

Payment system policies are directed to continue to strengthen the reliability of the payment system's infrastructure and industrial structure, as well as expand the acceptance of payment system digitization.

Furthermore, in addition to holding down the BI rate benchmark interest rate, the central bank also withheld the deposit facility interest rate at the level of 5.5 percent and the lending facility interest rate at the level of 7 percent.

Ibrahim estimates that the rupiah will fluctuate but close higher in trading Thursday, August 22, 2024, in the price range of IDR 15,440 - IDR 15,550 per US dollar.