Rupiah Potentially Weakens Driven By External And Internal Sentiment

Rupiah (Photo: Antara)

JAKARTA - The rupiah exchange rate in trading Thursday, October 24, 2024 is expected to weaken against the United States (US) dollar.

Quoting Bloomberg, the Rupiah exchange rate on Wednesday, October 23, 2024, the rupiah exchange rate on the spot market closed down 0.38 percent at the level of Rp. 15,627 per US dollar. Meanwhile, the Jakarta Interbank Spot Dollar Rate (Jisdor) exchange rate closed lower by 0.38 percent to a price level of Rp. 15,620 per US dollar.

Director of PT Profit Forexindo Berjangka Ibrahim Assuaibi conveyed sentiment such as higher US returns; safe haven inflow amid geopolitical tensions; and the relatively resilient US economy is expected to end soon, hampering the movement of the US dollar.

"The latest signs of resilience in the US economy trigger an increase in betting that the Fed will cut interest rates by 25 basis points in November, smaller than the 50 bps cuts seen in September. Traders are also seen estimating higher terminal interest rates," he explained in his statement, quoted Thursday, October 24.

In addition, the persistent tensions in the Middle East, as Israel continues to launch attacks on Hamas and Hezbollah.

Meanwhile, US diplomats were seen trying to push for a ceasefire, but there are still no signs of de-escalation in the conflict. Israel is also reportedly preparing a counter-attack against Iran.

Domestically, Ibrahim said the International Monetary Fund or IMF projects that Indonesia's economic growth will still be 5.1 percent in 2029. Meanwhile, Indonesia's 2024 economic growth is estimated to remain 5.0 percent or stagnant from last year. This is stated in the October 2024 edition of the World Economic Outlook published by the IMF or the International Monetary Fund.

In the report, the IMF projects that Indonesia's economic growth this year will reach 5.0 percent. As in previous years, it is estimated that it will remain in the 5 percent trend.

But in the future, Indonesia's economic growth forecast does not show a significant increase. For example, in 2025 it is estimated that it will only reach 5.1 percent. Even in 2029 Indonesia's economic growth will remain at 5.1 percent. As is known, 2029 is the end of President Prabowo Subianto's term of office and his vice president, Gibran Rakabuming Raka.

The IMF projection seems to show that Prabowo's ambitions still tend to be difficult to achieve. Meanwhile, another indicator projected by the IMF is that Indonesia's inflation will be stable at 2.3 percent in 2024. Then, the current account balance in 2024 is estimated to be minus 1 percent and the unemployment rate in 2024 is 5.2 percent.

Ibrahim estimates that the rupiah will fluctuate but close lower in trading Thursday, October 24, 2024, in the price range of IDR 15,610 - IDR 15,720 per US dollar.