Trade Balance Surplus Encourages Rupiah Strengthening This Morning

Illustrated. (Irfan Meidianto / VOI)

JAKARTA - The rupiah exchange rate on the spot market immediately stepped on the gas at the opening of trading on Wednesday, September 16. The rupiah opened up by 55 points or 0.37 percent to the level of Rp14,790 per US dollar (US).

Monex Investindo Futures Head of Research, Ariston Tjendra, said the financial market was seen in a wait and see mode this morning ahead of the announcement of the results of the US Central Bank meeting at dawn.

"This morning, the US dollar seems to have turned stronger against regional exchange rates. Previously the US dollar was under pressure due to expectations that the Fed's policy will be more relaxed to help restore the US economy during the COVID-19 pandemic," Ariston told VOI.

In addition, he continued, the strengthening of the rupiah this morning was supported by the sentiment of a trade balance surplus, inflows of foreign funds, and high foreign exchange reserves.

The Central Statistics Agency (BPS) noted that the August 2020 trade balance experienced a surplus of US $ 2.33 billion, lower than the previous US $ 3.26 billion in July 2020.

Meanwhile, this value was obtained from the position of export value of US $ 13.07 billion, which was higher than imports which reached US $ 10.74 billion during August 2020.

"That makes the rupiah's fundamentals stronger," he said.

External sentiment also has the potential to support the strengthening of the rupiah. According to Ariston, today the rupiah will move in the range of IDR 14,800-14,900 per US dollar.