Rupiah After The Prabowo-Gibran Inauguration Has The Potential To Strengthen, Driven By Positive Responses By Domestic Market Actors

Illustration (Photo: Doc Antara)

JAKARTA - The rupiah exchange rate in trading Monday, October 21, 2024 is expected to move higher against the United States (US) dollar.

Quoting Bloomberg, the Rupiah exchange rate on Friday, October 18, 2024, the rupiah exchange rate on the spot market closed up 0.17 percent at the level of Rp. 15,481 per US dollar.

Meanwhile, the Jakarta Interbank Spot Dollar Rate (Jisdor) exchange rate of Bank Indonesia (BI) closed up 0.32 percent to a price level of IDR 15,466 per US dollar.

Commodity and Currency Observer Lukman Leong said that the movement of the rupiah is expected to strengthen against the corrected US dollar amid the risk on sentiment supported by optimism that investors will stimulus in China and cut interest rates by PBoC.

In addition, according to Lukman, the inauguration of the president and the cabinet will also be responded positively in a smooth transition and Sri Mulyani's return in the cabinet.

Director of PT Profit Forexindo Berjangka Ibrahim Assuaibi said that the current economic condition tends to be less stable, coupled with the growing financial burden, the growing debt interest, President-elect Prabowo Subianto, to re-place Sri Mulyani Indrawati as Minister of Finance in his new cabinet with the help of three deputy ministers is a realistic and wise attitude.

"The appointment of Sri Mulyani is a strategic effort so that the upcoming new cabinet economy team can immediately work, considering that her experience as Minister of Finance for almost two previous presidential terms made Sri Mulyani able to continue the unfinished work," he explained in his statement, quoted Monday, October 21.

Even so, Prabowo saw the need for regeneration within the Ministry of Finance, especially at ministerial posts, so that three deputy ministers were appointed to accompany Sri Mulyani.

The three names are Suahasil Nazara, who is currently Deputy Minister of Finance I and has experience in leading a number of institutions under the Ministry of Finance, Thomas Djiwandono, who is currently Deputy Minister of Finance II, and Anggito Abimanyu, who is a senior economist and former Head of the Fiscal Policy Agency (BKF).

Meanwhile, regarding the establishment of the State Revenue Agency, there is a positive and negative side regarding the separation of state revenue management with the Ministry of Finance.

Ibrahim said that if the authority is separated, the performance of the two institutions will be more focused, while if the authority is still combined, then synchronization between expenditure and income can be done better.

Lukman estimates that the movement of the rupiah will fluctuate but close higher in trading Monday, October 21, 2024, in the price range of IDR 15,400 - IDR 15,550 per US dollar.

Meanwhile, Ibrahim estimates that the rupiah will fluctuate but close higher in trading Monday, October 21, 2024, in the price range of IDR 15,380 - IDR 15,500 per US dollar.