JAKARTA - The rupiah exchange rate in trading Tuesday, December 24, 2024 is expected to move higher against the United States (US) dollar.
Quoting Bloomberg, on Monday, December 23, 2024, the rupiah spot exchange rate closed up 0.15 percent to the level of Rp. 16,197 per US dollar. Meanwhile, the Jakarta Interbank Spot Dollar Rate (Jisdor) exchange rate of Bank Indonesia (BI) closed up 0.68 percent to a price level of Rp. 16,159 per US dollar.
Director of PT Profit Forexindo Berjangka Ibrahim Assuaibi said data showing a two-day slowdown in inflation provided a little relief after the Federal Reserve cut interest rates and indicated inflation was strong enough to reduce cuts by 2025.
"The market now expects the first cuts in 2025 to take place in June, and expects about two cuts in the coming year, according to the CME FedWatch Tool," Ibrahim said in his statement, quoted Tuesday, December 24.
Data from the Commerce Department shows the personal consumption expenditure price index, the Fed's preferred inflation gauge, rose 0.1 percent in November after an unrevised 0.2 percent increase in October.
However, in 12 months to November, the price index of PCE rose 2.4 percent, compared to the 2.3 percent increase from year to October and slightly below the 2.5 percent estimate. However, the annual increase in core inflation, excluding turbulent food and energy, remains at 2.8 percent, well above the central bank's target of 2 percent.
Ibrahim said the US Government would start partial closures if Congress did not extend the deadline for a spending bill backed by President-elect Donald Trump to be passed at midnight on Friday. The bill failed to be passed in the House of Representatives on Thursday.
Meanwhile, from within the country, the Ministry of Finance (Kemenkeu) guarantees that Indonesia's economic growth target will not be strengthened, due to the policy of increasing value added tax (VAT) to 12 percent as of January 1, 2025. The government believes the economy can still grow at the level of five percent.
The government ensures that it provides additional food assistance stimulus packages as an economic cushion for the community. The target for economic growth next year will not be sluggish due to the policy of increasing VAT. Meanwhile, 2025 economic growth will still be maintained according to the APBN target of 5.2 percent.
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Along with that, the government believes that inflation will also be maintained next year. The impact of the increase in VAT on inflation is considered minimal. The increase in inflation is still maintained in the targeted range in 2024 and 2025, namely 2.5 plus minus 1 percent.
However, for goods and services that are strategic in nature, the government continues to provide facilities for exemption from the imposition of VAT.
Ibrahim estimates that the rupiah will fluctuate but close higher in trading on Tuesday, December 24, 2024, in the price range of IDR 16,130 - IDR 16,200 per US dollar.
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