Rupiah Is Predicted To Be Weakened On Thursday, Pressured By The Fed's Minutes

Illustration. (Photo: Doc. Antara)

JAKARTA - The rupiah exchange rate transacted between banks in Jakarta on Thursday is predicted to weaken, under pressure from the minutes of the meeting of the US central bank, the Federal Reserve (Fed).

Reporting from Antara, Thursday, May 20, at 9.35 a.m. local time, the rupiah weakened 80 points or 0.56 percent to IDR 14.315 per US dollar compared to the position at the previous trade closing, which was IDR 14.273 per US dollar.

"The rupiah may weaken again today against the US dollar due to the market's anticipation of the contents of the US Central Bank meeting minutes released early this morning", said money market observer Ariston Tjendra.

The minutes mentioned statements by several members of the board of governors who opened up opportunities for discussions on monetary tightening in the US as the economy began to recover.

The yield on the 10-year US bond seems to have strengthened to around 1.69 percent after the minutes were released. Whereas the previous day the yield was in the range of 1.63 percent.

"The increase in yield could trigger the strengthening of the US dollar against other exchange rates", said Ariston.

On the other hand, the Central Statistics Agency (BPS) will release Indonesia's trade balance data for April 2021 today.

Analysts are still expecting a surplus of one billion US dollars. According to Ariston, the surplus might support the strengthening of the rupiah exchange rate.

Ariston estimates that today's rupiah has the potential to weaken to the range of IDR 14.330 per US dollar with potential support at the range of IDR 14.270 per US dollar.

On Wednesday, 19 May, the rupiah closed down 17 points or 0.12 percent to IDR 14.290 per US dollar compared to the position at the previous closing trade of IDR 14.273 per US dollar.