Jakarta, CNBC Indonesia – The rupiah exchange rate finally strengthened against the United States dollar (US) on Wednesday’s trade (19/8/2020), at the same time closing this week, because domestic financial markets had the Hijri New Year holiday last Thursday, and joint leave today, Friday (21 / 8/2020).
According to Refinitiv data, the rupiah strengthened 0.4% to Rp.14,770 / US $, with this strengthening Garuda currency managed to end 6 consecutive days of depreciation.
It turns out that behind the poor performance of the rupiah, it turns out that the rupiah is the only major Asian currency that market players are not interested in.
This is reflected in the biweekly survey conducted by Reuters.
The survey shows that investors are still taking a short position in the rupiah, even in the last 2 surveys.
The survey from Reuters uses a range of -3 to 3. A positive number means that market players are taking a long position against the US dollar and a short position against the rupiah, and vice versa.
The survey results released on Thursday (20/8/7/2020), showed the number 0.43 decreased slightly compared to the previous survey results of 0.45. This means that investors have reduced the rupiah short position, but have not yet taken a long position.
On the other hand, investors have already taken long positions (longother major Asian currencies, so the rupiah is the only currency that is not in demand.
The Thai baht in the survey released July 23 still accompanied the rupiah to become the “discarded” Asian currency, but that position has reversed in the last 2 survey releases.
The survey conducted by Reuters is consistent with this year’s movement. Last March, when the rupiah was experiencing volatility, investors took a short position (short) rupiah, with a survey figure released by Reuters of 1.57. The higher the positive value, the greater the rupiah short position investors take.
Entering April, the rupiah slowly strengthened and the results of a Reuters survey showed that the rupiah’s short position was diminishing, until finally investors took a long position starting on May 28. As a result, the rupiah posted a gain of more than 15% from early April to early June.
Now investors are back to ‘throwing away’ rupiah in 4 consecutive surveys, even though the value has decreased, but it has remained warning.
In the survey, the reason investors are still not interested in the rupiah is that Bank Indonesia (BI) is predicted to lower its benchmark interest rate again this year. When interest rates are lowered, the yield on Government Securities (SBN) will also decline, thereby diminishing investment attractiveness.
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