Jakarta –
The exchange rate of the United States (US) dollar against the rupiah almost touched Rp. 15,000. As quoted from Reuters, the US dollar is currently at Rp. 14,945.
Money market observer Ariston Tjendra explained that the strengthening of the dollar was due to recession sentiment and the increase in US benchmark interest rates. Furthermore, Ariston explained, US bond yields have decreased. This shows that market participants are securing their assets.
“The yield on 10-year US bonds has moved below 3%, which is around 2.88%. Recession issues are the cause of the shift in investment by financial market players to US bonds. The prices of risky assets, including the rupiah, are under pressure. In the midst of the central bank’s tightening monetary policy world plus high inflation, market participants view the risk of a recession as increasing,” he explained detik.comMonday (4/7/2022).
He said market participants were also anticipating the potential for an aggressive increase in the US benchmark interest rate. Moreover, the Federal Reserve has often given signals to push interest rates in order to reduce inflation in the country.
“In addition, the market is still anticipating the potential for an aggressive increase in the US benchmark interest rate. The narrowing yield difference between Indonesia and the US has prompted the market to seek safety in US dollar assets compared to the rupiah, thus contributing to pressure on the rupiah,” he explained.
Similarly, the Director of PT Profit Forexindo Berjangka, Ibrahim Ascustombi, said that the potential increase in the US benchmark interest rate would make market players turn to the dollar.
“Speculation about rising interest rates and high inflation is what makes market participants tend to turn to the dollar. Because we know that high inflation, high interest rates will cause a recession,” he said.
“We know America in the first quarter saw a GDP contraction of 1.6%, in the second quarter there is a possibility of a contraction,” he continued.
Watch Videos “Whoops! Rupiah is getting worse, the US dollar is almost Rp. 15,000“
[Gambas:Video 20detik]
(acd/the)
–
