Rupiah Is Projected To Strengthen After The Announcement Of The BI Reference Interest Tribe

JAKARTA - The rupiah exchange rate on Friday, November 24, 2023 is expected to strengthen again, driven by internal and external sentiment.

Quoting Bloomberg, the Rupiah exchange rate on Thursday, November 23, the rupiah spot exchange rate slightly strengthened 0.14 percent to Rp15,553 per US dollar. Meanwhile, Jisdor's rupiah exchange rate fell 0.06 percent daily to a price level of Rp15,593 per US dollar.

Director of PT Profit Forexindo Berjangka Ibrahim Assuaibi estimates that the rupiah will fluctuate but close higher on Friday, November 24 trading in the price range of IDR 15,520- IDR 15,600 per US dollar.

He added that the dollar index lost about 0.2 percent in trading the previous day, but continued to strengthen for two consecutive days after data showed that weekly unemployment claims fell smaller than expected, indicating resilience in the labor market and creating uncertainty over interest rates.

"The data was preceded by a rather hawkish signal from minutes of the Federal Reserve meeting at the end of October, which created uncertainty over when the central bank intended to start cutting interest rates," he explained in his official statement Friday, November 24.

Ibrahim said "When the Fed maintains the prospect of higher interest rates for a longer period of time, traders are reducing some speculation that the bank will start cutting its interest rates no later than March 2024."

However, most traders are betting that the bank has finished raising interest rates, which in turn brings dollar trading close to its lowest position in three months. This trend provides support to Asian currencies this week.

In addition, the Market is also observing further stimulus measures from the government, as Beijing is seen preparing more monetary support for the slumped property sector.

The current focus is on China's purchase manager index data for November, which will be released next week, to get more signs about the economy after a series of weak readings in October.

Ibrahim conveyed that the Meeting of the Board of Governors of Bank Indonesia (BI) decided that the benchmark interest rate or BI for 7 days reverse repo rate (BI7DRR) remained at the level of 6 percent. The Deposit Facility interest rate also remains at 5.25 percent, as well as the Lending Facility interest rate at the level of 6.75 percent.

This is in line with the majority of institutions. Of the 13 institutions involved in the establishment of consensus, 10 agencies/agencies estimate that BI will hold interest rates at the level of 6.00 percent.

The Deposit Facility interest rate is now in the 5.25 percent position, and the Lending Facility interest rate is 6.75 percent. Three institutions estimate an interest rate increase of 25 basis points (bps) to be 6.25 percent.

According to Ibrahim, entering the political year, the government will continue to focus on building the foundation to achieve high income status in 2045. Indonesian fundamentals will not change just because of the political year factor.

"The government will continue to focus on building the quality of human resources, and building infrastructure, so that Indonesia's productivity can increase," he said.

To achieve this goal, the government will take various short-term steps for stabilization. This step must also be a special concern to be able to continue to build this foundation.

Then, the synchronization and implementation of the HKPD Law will also continue to be improved because it will start running later this year and next year. Even though it is called a political year, we have a lot of foundational work that needs to be strengthened. Meanwhile, the APBN will continue to be a tool or instrument that protects the economy and society.