Calm! There is a “booster” for tomorrow’s rupee

Jakarta, CNBC Indonesia – The rupee exchange rate, which has weakened for five consecutive days this week, is expected to get a “booster” early next week.

Dody Budi Waluyo, Deputy Governor of Bank Indonesia (BI) that the exchange rate weakening will be limited, in line with the good news from the Indonesian economy to be announced by the Central Statistics Agency (BPS) early next week, Monday (7/11/2022). BI believes that economic growth in the third quarter of 2022 will be more than 5.5%.

Another good news that has already arrived is inflation which is below the forecast for October 2022, which is 5.7%. Year after year (aaaaaaaaaaaaaaaaaaaaaaaaaa

“We estimate it will be relatively limited, supported by optimism for economic growth in the third quarter,” Dody told CNBC Indonesia, quoted on Sunday (11/06/2022).

The government estimates that Indonesia’s economic growth will grow by 5.7% in the third quarter, while BI expects gross domestic product to grow by 5.5% in the quarter.

In addition, the driving factor for the strengthening of the rupee also came product government bonds (SBN) increasingly competitive with US Treasury yields. Now the 10-year SBN yield is around 7.5%.

Dody also explained that the weakening of the rupee this week was triggered by the US dollar which was too strong, especially after the announcement of a 75bp hike in the benchmark interest rate by the US Federal Reserve (the Fed). 3.75-4%.

“In line with the DXY move which strengthened on a broad basis following yesterday’s announcement at the 112.72 level, sentiment at risk or flight towards quality in some countries emerging market it rose and caused the weakening of most exchange rates in the region, including Indonesia, “he explained.

From CNBC Indonesia records, the rupee weakened for 5 consecutive days against the US dollar on Friday (11/4/2022), to Rp 15,735 / US $. This level is the weakest since April 2020. Throughout this week, the rupee was recorded to have weakened by around 1% and throughout 2022 by around 9%.

[Gambas:Video CNBC]