JAKARTA – The rupiah exchange rate in the local market closed up 0.29 percent at the level of IDR 16,365 per US dollar on Wednesday, June 19.
Meanwhile, the Jakarta Interbank spot dollar (Jisdor) Bank Indonesia (BI) rupee exchange rate closed up 0.03 percent at the price level of IDR 16,368 per US dollar
Commodity analyst and Chairman of HFX International Futures Commissioner Sutopo Widodo said historically that the rupiah reached its all-time high at the level of IDR 16,800 in June 1998.
“Nevertheless, the rupee remains vulnerable to weakening, as the dollar index was still stable around 105.3 on Wednesday after falling for two consecutive sessions, trading volume is expected to remain thin because most US investors are on vacation,” he told VOI on Wednesday.
Sutopo said Tuesday that Greenbacks were under pressure because U.S. retail sales data would be weaker than previously thought, reinforcing speculation that the Federal Reserve would immediately cut its shares.
Additionally, according to Sutopo, retail sales grew less than expected in May, while the previous month’s number had been significantly lower, indicating a slowdown in economic activity in the second quarter.
“The market now sees about two-thirds of the chance that the Fed will begin easing in September, with about twice as much of an interest rate cut seen this year,” he said.
Meanwhile, Bank Indonesia is expected to keep interest rates unchanged at 6.25 percent at the May 2024 meeting, in line with market expectations.
Sutopo said this number remains at a record high since the introduction of this benchmark in 2016, which aims to ensure that general inflation remains at the target of 2.5% plus minus 1% in 2024 and 2025 , while maintaining the flow of foreign capital inflow and the stability of the rupee exchange rate.
Domestically, Sutopo said Indonesia’s economy showed resilience, achieving growth of 5.11 percent in the first quarter of 2024, mainly driven by strong domestic demand despite high uncertainty in global financial markets.
“The inflation rate fell to 3% in April 2024 from the seven-month high of 3.05% in the previous month,” he said.
Meanwhile, Sutopo said the rupee weakened to a 4-year low against the US dollar in April, so it remains subject to changes in global risk sentiment related to US monetary policy and to global conflicts.
Sutopo estimates that the rupiah will be traded on Thursday, June 20, 2024 in the range of IDR 16,350 per US dollar.
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