ILLUSTRATION. The rupiah exchange rate has the potential to continue strengthening in trade in the next week.
Reporter: Intan Nirmala Sari | Editor: Wahyu T. Rahmawati
KONTAN.CO.ID – JAKARTA. The rupiah exchange rate has the potential to continue strengthening in trade in the next week. As for what will become the supporting sentiment will come from domestic and global.
Based on Bloomberg data, on Friday trading (9/10) the rupiah was successfully closed up 0.07% to Rp 14,700 per US dollar and a week of 1.11% higher against the US dollar from Rp 14,865 per US dollar in Friday (2/10). Meanwhile, Bank Indonesia middle rate data (Jisdor) recorded a 0.08% strengthening of the rupiah to a level of Rp 14,737 per US dollar on Friday (9/10) or an increase of 1.03% in a week.
HFX International Futures analyst Ady Phangestu revealed, both external and internal sentiment will still drive the rupiah for the next week. From externals, the risk of the development of the virus will disrupt recovery and become a global spotlight.
Furthermore, the slow pace of US stimulus development, ongoing US-China friction, and the US presidential election weighed on the economic recovery potential. “Apart from all the anxiety related to US President Donald Trump who is positive for Covid-19, stimulus talks also reached a dead end, the major stock indexes ended the week very high,” Ady told Kontan.co.id, Sunday (11/10).
In addition, the increasing 10-year US Treasury yield also provided no support for greenback. Instead, flow back safe-haven happens in full force. On the other hand, Ady assessed that October 2020 would be full of surprises, accompanied by the approaching peak of the US Presidential election in November 2020.
Meanwhile, from internal or domestic sentiment, the Job Creation law actually weighs on the strengthening of the rupiah. Ady assessed that without sentiment on the Job Creation Law, the rupiah should have been able to move mightily at this time, taking advantage of the weakening US dollar index in the last few weeks.
“Obviously there are concerns about foreign funds entering Indonesia, plus investor concerns over the government’s indecisiveness which tends to appear passive in creating conditions for the world of work,” he said.
Furthermore, the political drama and hidden interests of the anti-government groups are trying to create chaos also still a scourge, before the government conducts an in-depth investigation. For this reason, Ady predicts that the rupiah still has the opportunity to strengthen and has the potential to move in the range of Rp. 14,500 per US dollar to Rp. 14,800 per US dollar.
Maybank economist Myrdal Gunarto predicts that the movement of the rupiah will continue to strengthen for the next week. “The prediction is that it will be in the range of Rp. 14,500 per US dollar to Rp. 14,900 per US dollar,” Myrdal told Kontan.co.id, Sunday (11/10).
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Reporter: Intan Nirmala Sari
Editor: Wahyu T. Rahmawati