Stronger Rupiah, Economist: The Effect Of Demonstrations In The US And Trump's Threat To WHO

Illustrated (Irfan Meidianto / VOI)

JAKARTA - The rupiah exchange rate against the United States dollar (US) is recorded to continue to strengthen. This weekend, one US dollar is equivalent to Rp.13,878. A number of factors are said to have influenced the strength of the Garuda currency.

Among other things, Bank Indonesia's policies were responded positively by the market. Then, there was an easing of Large-Scale Social Restrictions (PSBB) during the pre-COVID-19 period.

However, it was denied by an Economic Observer from the Institute for Development of Economics and Finance (INDEF) Bima Yudhistira. According to him, the strengthening of the rupiah exchange rate against the US dollar was due to the benefits of large-scale demonstrations in Uncle Sam's country. The demonstration sparked the death of black man George Floyd.

"The rupiah benefited from the massive demonstration in the US, the effect of the US and China dispute over the Hong Kong issue, and Donald Trump's threat to leave the WHO," Bhima told VOI Saturday, June 6.

Then, the current geopolitical situation is uncertain with the US epicenter. So that global market players began to leave the US dollar. Based on the data, the dollar index was recorded to have corrected by -1.87% in the past week to a level of 96.5.

"The dollar index is a comparison of the US dollar with 6 currencies of other countries, including the euro and Japanese yen," he said.

Global market players who leave the US dollar, he said, invest their money in developing countries. So it is undeniable that the dollar will weaken.

"So it is still premature positive rupiah sentiment due to domestic factors such as the easing of the PSBB," he said.