Wednesday's Rupiah Has the Potential to Strengthen, Here's the Cause

Illustration. (Photo: Doc. Antara)

JAKARTA - The rupiah exchange rate in trading on Wednesday 13 March 2024 is expected to move stronger again against the United States (US) dollar.

Quoting Bloomberg, the Rupiah exchange rate on Friday 8 March, the spot rupiah exchange rate closed up 0.41 percent IDR 15,590 per US dollar. Meanwhile, the Jakarta Interbank Spot Dollar Rate (Jisdor) Bank Indonesia (BI) rupiah exchange rate closed up 0.35 percent to a price level of IDR 15,603 per US dollar.

Director of PT Laba Forexindo Berjangka Ibrahim Assuaibi said the European Central Bank (ECB) had determined the possibility of lowering interest rates in June, while Federal Reserve Chair Jerome Powell also said the same thing regarding the path of US interest rates.

"The two-year US Treasury yield, which usually reflects expectations of short-term interest rates, fell to a one-month low of 4.499 percent on Friday as traders increased speculation about an imminent Fed rate cut," he said in a statement quoted on Wednesday, March 10.

From the internal side, Ibrahim said that since the beginning of last year, food prices, especially rice, have started to move up. The increase is reckless. The sight of residents queuing long to get cheap rice was seen in various areas.

It's been two months, the price of rice is still not under control. Approaching the fasting month, rice prices have risen again. It's not just rice whose price has increased. Prices of other foods such as eggs, cooking oil, meat, onions and chilies also jumped.

Bank Indonesia (BI) has warned about this food price volatility. This is because the rate of increase in food price inflation has exceeded the rate of increase in the regional minimum wage (UMR) and the increase in civil servant salaries.

Referring to data from the Central Statistics Agency (BPS), food price inflation last year reached 8.47 percent. Meanwhile, the average increase in salaries for State Civil Servants (ASN) in the last 5 years is only 6.5 percent and for UMR, the increase is only less than 5 percent from 2020-2024.

Ibrahim estimates that the rupiah will fluctuate but close higher in trading Wednesday, March 10 in the price range of IDR 15,540 - IDR 15,630 per US dollar.