Rupiah is Weakened This Week and Will Be Like That Later
According to the Institute for Development of Economics and Finance (Indef), the Rupiah’s value will be weakened this week. Last week, we can see a glimpse of hope, when the Indonesia Stock Exchange (IDX) increases for around 53 points. But, because of some factors, according to Bima Yudhistira from Indef, this week US Dollar will give some pressure to Rupiah, which will continue until next week. Bima predict that Rupiah will be move at the 13,890 Rupiah – 13,990 Rupiah position per Dollar US.
Bima also explained that the main factors that affect the Rupiah weakened movement is the foreign investor. The foreign investors are currently trying to record net sale, which reach 5.3 trillion Rupiah, and it has been like that for the whole week. There is 3 percent rate of increase for US 10-year treasury yield (the highest rate since 2014), which mostly affect the foreign investor movement in Indonesia. That condition also increases the risk investment in Indonesia and other developing countries. Therefore, there are many corrections on stock market that will affect the local currency.
More than that, Bima is also stated that the domestic factor affect the movement of the Rupiah for the few weeks later. The first domestic factors that happen come from consumer part. According to Consumer Confidence Index (IKK), the consumer’s trust level has decreased. Then it gets worst when Bank of Indonesia just start to increase the 7-days repo program as the data from that was released. That movement was definitely too late, which make Indonesia also late in dealing with the foreign investor movement. Bima also said that Malaysian and Singaporean central bank did the reference rate adjustment faster than Indonesian. That decision make the Malaysian and Singaporean currency can survive and stay at the stable position, even though there is that decision that was made by US Government.
This week, Rupiah still move around at 13,880 Rupiah – 13,900 Rupiah position per Dollar US. However, with the situation that we can see right now, there is still big fluctuation that will affect the Rupiah movement this week. The Bank of Indonesia Governor, Agus Martowardojo also added that there is decrease in Rupiah value. According to him, there is value depreciation of Rupiah when he looks at it from month-to-date movement, which reaches minus 0.88 percent. With this condition, there will be problem that bond to happen in the future, if government doesn’t do something about it.