Rupiah Strengthens Again, Can It Return to the Rp17,000 Range?

The rupiah’s exchange rate against the United States dollar is currently in a strengthening trend at the end of this week’s trading, coinciding with a weakening US dollar index (DXY). With this trend, can the rupiah exchange rate return to the Rp17,000 per US dollar level in the short term? Bank BTN economist Myrdal Gunarto stated that a key condition for the rupiah to reach that level is the easing of global pressures, with world oil prices consistently around US$70 per barrel. “If it is to return to below Rp18,000, the condition is that global pressures ease, the war truly ends, oil prices also fall below US$70 per barrel, and investor views on Indonesia also return to normal,” Myrdal told CNBC Indonesia on Friday. Myrdal said that if this combination of conditions is created, the rupiah could strengthen to Rp17,600 per US dollar. “Well, if that happens, I think investors will return and make the rupiah strengthen again to a level below Rp18,000,” said Myrdal. “Because our projection is at a level of around Rp17,600,” he stressed. As is known, the rupiah has again surpassed the Rp18,000 per US dollar level after previously being in the Rp17,000 range. Citing Refinitiv data, the rupiah exchange rate closed at Rp18,045 per US dollar, appreciating 0.14% in Friday’s trading. This strengthening reversed the rupiah’s position at the previous day’s close, when the Garuda currency closed at its weakest level in the last month. Throughout today’s trading, the rupiah had actually opened stronger this morning. The strengthening continued until the close of trading, with the rupiah moving in the range of Rp18,045 to Rp18,075 per US dollar. Meanwhile, the US dollar index (DXY), which measures the greenback’s strength against six major world currencies, was observed to have corrected by 0.11% to the level of 100.788 as of 15.00 Western Indonesia Time. The rupiah’s movement in today’s trading received a tailwind from the weakening of the US dollar index in the global market. The US dollar weakened for the second consecutive session after the US and Iran launched attacks again. Although tensions in the Middle East are increasing, market participants are also observing oil price developments and global inflation prospects.