Rupiah Potentially Strengthening Driven By Responses From Domestic Market Actors

Rupiah (Photo: Antara)

JAKARTA - The rupiah exchange rate in trading Friday, October 18, 2024 is expected to move higher against the United States (US) dollar.

Quoting Bloomberg, the Rupiah exchange rate on Thursday, October 17, 2024, the rupiah exchange rate on the spot market closed up 0.02 percent at the level of Rp. 15,507 per US dollar. Meanwhile, the Jakarta Interbank Spot Dollar Rate (Jisdor) exchange rate of Bank Indonesia (BI) closed higher by 0.13 percent to a price level of Rp. 15,516 per US dollar.

Director of PT.Laba Forexindo Berjangka Ibrahim Assuaibi said investors had ruled out cutting off the Federal Reserve's interest rate at the next policy meeting and estimated the election victory by former President Donald Trump.

"Trump's plan to implement tax cuts, loosen financial regulations, and higher rates is seen as positive for the dollar," he said in his statement, quoted Friday, October 18.

Meanwhile, Trump is seen ahead of Vice President Kamala Harris at the online betting market, while the latest media poll shows Harris slightly ahead. But with about three weeks remaining until the vote, the market is preparing for stiff competition.

Trump's policy is expected to be inflationary to an idea that weighed on Treasury returns and pushed the dollar to its strongest level since early August.

In addition, the market is also waiting for more cut in interest rates from major central banks. The European Central Bank is widely expected to cut interest rates at the end of the meeting on Thursday.

From a domestic perspective, the market responded positively to the election of a new cabinet arrangement which, because the president-elect prabowo chose a leader who had competence in his field. The inauguration of the cabinet is one of the important points, which is not only about politics.

But also how far the existing team will be able to achieve Indonesia's economic growth by 8 percent per year in the coming years. Therefore, market players and investors will certainly look forward to very carefully, anyone who will enter the cabinet.

Along with the summons of Sri Mulyani Indrawati, who is projected to return to become finance minister, according to her, market participants will respond positively. Maybe we should also wait for further determination from the existing cabinet, so that we can get further certainty about the next plan.

Ibrahim estimates that the rupiah will fluctuate but close higher in trading Friday, October 18, 2024, in the price range of IDR 15,430 - IDR 15,520 per US dollar.