Rupiah Opens Strengthening Awaiting Uncertainty Of US Economic Recovery

Illustrated. (Irfan Meidianto / VOI)

JAKARTA - The rupiah exchange rate on the spot market opened higher on trading Tuesday, September 29. The rupiah opened up 25 points to a level of Rp14,875 per US dollar (US).

Even though it was opened higher, Head of Research at Monex Investindo Futures, Ariston Tjendra said the rupiah was still under pressure due to market concerns about a slowdown in Indonesia's economic recovery.

"This concern can still be a negative sentiment for the rupiah's movement today," Ariston told VOI.

But on the other hand, he said, the US dollar which began to be depressed since yesterday could be the driving force behind the strengthening of the rupiah.

"The weakening of the US dollar was triggered by the continuation of the two US stimulus package plan with the latest proposal worth 2.2 trillion US dollars from the Democratic Party which will be negotiated with the Republican. This US stimulus will help the economic recovery in the US and provide positive sentiment to the risky asset market," he explained.

Ariston said that the rupiah has the potential to strengthen again if sentiment continues to weaken the US dollar.

"The potential is in the range of Rp. 14,800-14,950 per US dollar," he said.

Meanwhile, the Director of PT TRFX Garuda Berjangka, brahim Assuaibi, estimates that the rupiah will continue to weaken in today's trade. According to him, the focus of market players is still on the development of a stimulus plan for US economic recovery.

Some investors now expect the US Congress to pass any stimulus package, seen as essential to supporting the pandemic-hit economy, before elections.

Investors are also waiting for a lot of data as the end of the month is approaching. For example, China will release its manufacturing and non-manufacturing Purchasing Managers Index (PMI), as well as the Caixin manufacturing PMI, on Wednesday.

From within the country, Ibrahim assessed that the imposition of micro-scale social restrictions (PSBM) in various regions requested by President Joko Widodo will also stimulate people's purchasing power. PSBM is considered more effective than large-scale social restrictions (PSBB).

"The micro-scale PSBB will increase and increase people's purchasing power again because there are no restrictions in places that are economically based, such as markets, malls, restaurants and cafes and this can be applied in DKI Jakarta in the future," said Ibrahim.