Bank of Indonesia

Bisnis.comJakarta – The Rupiah Token exchange rate is against the dollar of the United States (US) in trade today, Tuesday (8/10/2024) it will change but it will close lower in the range of 15,670-Rp 15,780, as there is an increase in conflict the Middle East causing investors to reduce their bets on the interest rate of the decline The Fed.

In trading on Monday (7/10) the rupiah closed down 1.3% to IDR 15,686.5 per US dollar. At the same time, index US dollars changed so far +0.03% compared to 102.46.

Meanwhile, other currencies in the Asian region closed mixed. The Japanese yen rose 0.34%, the Singapore dollar rose 0.13%, the Taiwan dollar fell 0.41%, South Korea gained 0.34%, and the Philippine peso fell 0.90%.

Forexindo Futures Director of Profit, Ibrahim Assuaibi, explained that global sentiment stemming from a strong jobs data report for September led traders to cut bets that the Federal Reserve will cut interest rates by another 50 basis points.

US non-farm payrolls increased by 254,000 last month, topping the 140,000 new jobs expected by economists polled by Reuters. The unemployment rate also fell unexpectedly, to 4.1% from 4.2% in August.

Improving economic data and more aggressive comments from Fed Chairman Jerome Powell on Monday, when he pushed back against expectations of big, permanent cuts in interest rates, prompted traders to back bets on a 50 basis point cut. at the next meeting of the Fed on November 6. -7, 2024.

That chance disappeared entirely after Friday’s data. Traders now expect no chance of a 50 basis point rate cut, down from about 31% earlier on Friday and 53% a week ago, according to the CME Group’s FedWatch Tool.

A cut of 25 basis points is considered almost certain, with traders also seeing a small chance that the Fed will leave interest rates unchanged.

In addition, emotion also comes The Middle Eastwith Hezbollah rockets hitting Israel’s third largest city, Haifa. Reports also say that Israel is considering attacking Iran’s oil production facilities.

It is a move that could disrupt oil supplies and signal a major escalation in the conflict.

Domestically, Bank Indonesia (BI) raised the position of foreign exchange reserves (cadev) at the end of September 2024 worth US$ 149.9 billion, down slightly after the previous month recorded the highest record since December 2023.

This position was recorded to be lower than foreign exchange reserves at the end of August 2024 with a value of US $ 150.2 billion. This position was relatively stable and fell slightly due to the government’s obligations in debt payments.

The development of foreign exchange reserves is affected, among other things, by paying the government’s foreign debt. At the same time, the foreign exchange reserves position at the end of September 2024 is equivalent to financing 6.6 months of imports or 6.4 months of imports and the payment of the government’s foreign debt, and it above the international standard of applicability of about 3 months of importation.

Bank of Indonesia assesses whether foreign reserves can support the stability of the external sector and maintain the stability of the macroeconomic and financial system. In the future, Bank Indonesia believes that foreign exchange reserves are still adequate to support the stability of the external sector.

For today’s trading, Ibrahim believes that the rupiah will fluctuate, and has the potential to close lower in the range of IDR 15,670-IDR 15,780 per US dollar.

Bisnis.comJakarta – The Rupiah Token exchange rate is against the US dollar it is expected to fluctuate but close higher in the range of IDR 15,070-IDR 15,180 in trade at the beginning of the week today, Monday (23/9/2024).

At the end of trading on Friday (20/9), the rupiah strengthened 0.58% or 89 points to Rp 15,150 per US dollar. At the same time, dollar index It was seen rising 0.09% to 100.7.

The director of PT Laba Forexindo Berjangka, Ibrahim Assuaibi, said that in trading last weekend, the rupiah moved between several emotions. from abroad, The Fed kicking off an easing cycle that could see interest rates fall by as much as 125 basis points this year.

The Fed cut interest rates by 50 basis points, at the high end of market expectations. But Deer Chair Powell offered a less serious view interest rate medium to long term, suggesting that neutral interest rates will be much higher than previously seen. At the same time, traders welcomed the rate of sharp reduction in interest rates in the near future.

From within the country, referring to the Fed’s aggressiveness in reducing its benchmark interest rate by 125 basis points this year, then Bank of Indonesia (BI) as well as cut interest rates between 75 – 100 basis points in the range of 5.25%-5.00%. The aim of cutting the benchmark interest rate is to revive the wheels of the economy which was previously sluggish due to the high interest rates of bank credit.

On the other hand, a downward trend in the benchmark BI interest rate is expected to support economic growth to remain strong, especially for the banking industry.

The easing of BI’s monetary policy is expected to trigger a reduction in the cost of money, which will trigger a reduction in credit interest rates.

“The objective is to increase the demand for credit so that the economy can recover and improve during the transition period of the government,” Ibrahim said in a written statement last weekend, Friday (20/9/2024).

Then, Indonesia’s trade balance remains stable and foreign exchange reserves continue to increase. In August 2024, inflation overall down slightly to 2.12% annually (year on year / yoy), down from 2.13% yoy in July 2024. At the same time, this inflation rate remains within the BI target range of 1.5% to 3.5%

Ibrahim projects that the rupiah currency will fluctuate for trading this week, Monday (23/9/2024), but it will close stronger in the range of IDR 15,070 – IDR 15,180.