Analyst: Rupiah Will Strengthen Tuesday Despite Daily COVID-19 Cases Reaching 40,000

Illustration. (Photo: Doc. Antara)

JAKARTA - The rupiah exchange rate (exchange rate) transacted between banks in Jakarta on Tuesday still has the potential to strengthen, even though it is overshadowed by the daily COVID-19 cases which reached more than 40,000 cases.

The rupiah opened up three points or 0.02 percent to Rp14,490 per US dollar compared to the position at the previous close of Rp14,493 per US dollar.

Money Market Observer Ariston Tjendra said the rupiah has the potential to strengthen following improving sentiment of global financial market players.

"The global stock index as a risk asset looks to be strengthening. The market sees an improvement in company performance in the second quarter. This has pushed the market out of the safe assets of the US dollar and into risk assets," said Ariston, quoted from Antara, Tuesday, July 13.

In addition, Ariston continued, the improvement in sentiment was also supported by the monetary easing policy of the China People's Bank of China (PBoC) which reduced the Statutory Reserves or Statutory Reserves by 50 basis points, thereby increasing liquidity in the market.

"The attitude of the US Central Bank, which is also considering maintaining its monetary easing policy for a longer time, also supports sentiment towards the risk," said Ariston.

On the other hand, the increasing number of new COVID-19 cases, especially in Indonesia, which continues to set new records, has become a concern for market players.

"Economic growth could be disrupted if the Emergency PPKM is extended and this has the potential to restrain the strengthening of the rupiah against the US dollar," said Ariston.

In Indonesia, on Monday, July 12, the number of new COVID-19 cases set a new daily record of 40,427 cases, bringing the total number of confirmed COVID-19 positive cases to 2,567,630 cases.

Ariston said that today's rupiah has the potential to range from Rp. 14,470 per US dollar to Rp. 14,500 per US dollar.

On Monday, July 12, the rupiah closed up 35 points or 0.24 percent to a position of Rp. 14,493 per US dollar compared to the position at the close of the previous trade of Rp. 14,528 per US dollar.