The rupiah rose on expectations that US interest rate hikes would stop

Jakarta ( – The rupiah exchange rate (exchange rate) traded between banks in Jakarta at the end of Tuesday’s trading rose in line with market expectations that the increase in the United States (US) benchmark interest rate will stop.

On Tuesday, the rupiah closed up 72 points or 0.48 percent at IDR 14,899 per US dollar compared to the position at the previous close of IDR 14,971 per US dollar.

“The rupiah is still strengthening against the US dollar today, still due to expectations that the hike in the US benchmark interest rate will stop,” money market observer Ariston Tjendra told in Jakarta, Tuesday.

Ariston said data from the US manufacturing activity survey for March 2023 showed the lowest contraction or slowdown in three years, namely at the level of 46.3, down compared to the previous month at the level of 47.7.

“These unfavorable results fueled market expectations that the Fed will likely hold US interest rates on hold and perhaps end their hikes in the near future, driving the US dollar lower,” he said.

In addition, the fourth quarter of 2022 US Gross Domestic Product (GDP) growth was reported to be 2.6 percent, lower than the previous estimate of 2.7 percent.

Then, there is an increase in claims for unemployment benefits, a decrease in the growth of delayed home sales, and a decrease in inflation growth from the Core PCE inflation indicators and personal spending, as well as alertness to the banking crisis in the US.

These economic data also support market expectations that the increase in US benchmark interest rates will stop.

Meanwhile from within the country, inflation data for March 2023 which was stable and tended to fall, increased market confidence in the Indonesian economy and could help strengthen the rupiah.

When viewed from trends, annual inflation in March 2023 was 4.97 percent, down from 5.28 percent (yoy) in January 2023 and 5.47 percent (yoy) in February 2023.

In the morning, the rupiah opened up to Rp. 14,949 per US dollar. Throughout the day the rupiah moved in the range of IDR 14,877 per US dollar to IDR 14,955 per US dollar.

Meanwhile, Bank Indonesia’s Jakarta Interbank Spot Dollar Rate (JISDOR) exchange rate on Tuesday increased to IDR 14,913 per US dollar compared to the previous position of IDR 14,990 per US dollar.

Read also: Dollar falls in early Asian session due to sluggish US data, Aussie is stable
Also read: The yuan rose 106 basis points to 6.8699 against the US dollar
Also read: Aussie falls after RBA stops interest rate hike, dollar “rebounds”

Reporter: Martha Herlinawati Simanjuntak
Editor: Biqwanto Situmorang


Source link