Rupiah is Predicted to Strengthen Again, Increase in Commodity Prices is the Trigger

Illustration of Rupiah (doc. Antara)

JAKARTA - The movement of the Rupiah exchange rate against the United States (US) dollar on Monday, November 6, 2023 is expected to strengthen again, driven by rising commodity prices.

Quoting Bloomberg, on the Rupiah exchange rate on Friday, November 3, the spot rupiah exchange rate strengthened 0.81 percent to Rp. 15,727 per US dollar.

Furthermore, the Jisdor rupiah exchange rate strengthened 0.57 percent daily to IDR 15,771 per US dollar last Friday.

Ibrahim Assuaibi, Director of PT.Laba Forexindo Berjangka, said that the increase in world oil prices was related to the global situation, such as geopolitical tensions between Israel and Hamas.

"Of course, this will have an impact on inflation in developing countries, including Indonesia. However, the Government is ready to anticipate political turmoil by implementing economic mix policies and Bank Indonesia intervention," he explained in his statement, Friday, November 3.

Ibrahim said that oil price fluctuations in the world are correlated with global situations such as Israeli-Hamas tensions, world oil price trends which will of course affect domestic prices.

Ibrahim estimates that, influenced by fluctuations in world oil prices, inflation will start to increase in the future.

However, in the coming months the possibility of inflation due to the global situation will be visible. However, this really depends on the government taking preventive steps.

Apart from that, commodity prices on the international market, one of which is crude oil, have increased since July 2023. If you look at commodity prices on the international market, crude oil has experienced a rebound since July 2023.

Based on the World Economic Outlook, previously in July 2023, world inflation was estimated to experience inflation of 6.8 percent in 2023 and 5.2 percent in 2024. However, it was revised upwards in October 2023 to 6.9 percent and 5.8 percent respectively.

Likewise, with inflation in emerging markets and developing economies. Previously it was predicted that inflation would reach 8.3 percent in 2023 and 6.8 percent in 2024.

However, it has also been corrected upwards that developing countries will experience higher inflationary pressure, namely, 8.5 percent in 2023 and 7.8 percent in 2024.

Globally, inflation is expected to weaken in 2023 and 2024. Likewise with inflation in emerging market countries and developing economies. However, this prediction was corrected to increase in line with the upward trend in commodity prices on the global market.

Ibrahim estimates that the rupiah will fluctuate but close higher in trading Monday, November 6 in the price range of IDR 15,680- IDR 15,750 per US dollar.