Rupiah Potentially Strengthening Driven By Domestic Economic Stability Expectations

US dollar (Photo: Antara)

JAKARTA - The rupiah exchange rate in trading Monday, October 28, 2024 is expected to move higher against the United States (US) dollar.

Quoting Bloomberg, the Rupiah exchange rate on Friday, October 25, 2024, the rupiah exchange rate on the spot market closed down 0.40 percent at the level of Rp15,646 per US dollar. Meanwhile, the Jakarta Interbank Spot Dollar Rate (Jisdor) exchange rate closed lower by 0.23 percent to a price level of Rp15,629 per US dollar.

Director of PT. Laba Forexindo Berjangka Ibrahim Assuaibi said that the stability of the Indonesian Financial System in the third quarter of 2024 will be maintained amidst the dynamics of global geopolitical and the direction of easing monetary policy.

"This is in line with the easing of pressure on the global financial market after the easing of monetary policy was carried out by various major countries, (United States and Europe). However, the Indonesian economy is still well maintained," he said in a statement quoted on Monday, October 28.

Meanwhile, the domestic economy in the third quarter of 2024 is estimated to grow above 5 percent. This continues its positive performance in the second quarter of 2024, where the push from household consumption and investment is quite positive.

Ibrahim explained that household consumption growth is maintained, especially for the upper middle class. Meanwhile, the second aggregate demand factor is investment growing in line with the acceleration of the completion of national strategic programs or projects (PSN), including the capital city of Nusantara.

Then, inflation remains low and maintained in the range of 2.5 percent plus minus 1 percent. Inflation of the consumer price index or IHK was recorded as low in all components so that it reached 1.84 percent year on year in September 2024.

"The rupiah exchange rate also shows that strengthening is supported by the consistency of Bank Indonesia's monetary policy, the mix of monetary policy, and the occurrence of capital inflows back into the country," he explained.

Meanwhile, Ibrahim explained that the performance of the State Budget until the end of August was well maintained. The deficit was under control even though state revenue contracted 2.5 percent year on year, while state spending grew 15.3 percent.

Until the end of August 2024, fiscal health conditions were well maintained, as reflected in the surplus in primary balance of IDR 161.8 trillion and a deficit of IDR 153.7 trillion or 0.68 percent of GDP.

Ibrahim estimates that the rupiah will fluctuate but close higher in trading Monday, October 28, 2024, in the price range of Rp15,600 - Rp15,670 per US dollar.