Coordinating Minister for Economic Affairs Airlangga Hartarto Reveals Key Factor Behind Rupiah's Weakness: High Demand for US Dollars

Jakarta — Coordinating Minister for Economic Affairs Airlangga Hartarto said the high demand for the United States dollar (USD) is one of the main factors pressing on the rupiah, which breached the Rp17,700 per USD level. “Global factors are also highly influential, and as I said during the Hajj period, demand for dollars is high,” Airlangga told reporters in his Jakarta office on Tuesday. He said US dollar needs rose in the current period in line with corporate dividend payments following the annual financial reporting season, further compounded by a rise in global oil prices driven by the ongoing US–Iran conflict. Consequently, he views the combination of high dollar demand and rising world oil prices as a strong external pressure on the rupiah’s movements. “After the financial statements, dividend payments are largely in these months. So demand is indeed high. Plus oil prices are still rising,” he said. The coordinating minister hopes the rupiah can strengthen against the US dollar in the second semester. “Hopefully the second half of the year will be better,” he added. The rupiah at the close on Tuesday weakened by 38 points or 0.22 percent to Rp17,706 per USD from Rp17,668 previously. Meanwhile, Rully Nova, an analyst at Bank Woori Saudara, said the rupiah’s weakness is also influenced by the global oil price trend, which remains above USD100 per barrel. “The rupiah today weakened due to domestic factors as markets await the RDG BI (Bank Indonesia Board of Governors meeting) results to be announced tomorrow and limited fiscal space due to widening subsidies as global oil prices remain above USD100,” Nova said. (Antara)