Rupiah movement on Thursday influenced by US monetary policy developments

Muhammad Amru Syifa of the Research and Development department at the Indonesia Commodity & Derivatives Exchange (ICDX) stated that the movement of the rupiah exchange rate today is being influenced by developments in US monetary policy.

“The movement of the rupiah at this time is still influenced by the developments in US monetary policy and global market conditions,” he told ANTARA in Jakarta on Thursday.

The rupiah exchange rate against the US dollar at the opening of trading on Thursday weakened by 43 points, or 0.24 per cent, to Rp17,739 per US dollar, compared to the previous close of Rp17,696 per US dollar.

On Wednesday (16/9), the Federal Reserve (The Fed) raised the benchmark interest rate by 25 basis points to 3.75-4.00 per cent amidst US inflation remaining above target. This decision is seen as providing support for the US dollar and maintaining US Treasury yields at high levels, thereby limiting the potential for rupiah appreciation.

On the other hand, Amru continued, the decline in oil prices following the easing of supply concerns has provided some room for regional currencies to move more stably.

Regarding domestic sentiment, market attention is said to remain focused on fiscal conditions and financial market stability, particularly the government’s ability to maintain the credibility of the State Budget (APBN) amidst external pressures.

The movement of the rupiah is also reflected in the JISDOR rate, which on Wednesday (16/9) stood at Rp17,712 per US dollar, up from Rp17,687 on the previous day.

“Under these conditions, the rupiah has the potential to move volatilely and remains under pressure in the short term, within a range of Rp17,650 - Rp17,800 per US dollar. Subsequent movements will be influenced by the direction of the Fed’s policy, developments in US Treasury yields, and sentiment regarding domestic fiscal conditions,” he revealed.