Rupiah Will Reach New Equilibrium

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Kamis, 17 September 2015 10:18 WIB

Ilustrasi bursa efek dan kurs Rupiah. Getty Images

TEMPO.CO, Jakarta - The rupiah is forecast to continue to weaken until it reaches a new equilibrium in the range of Rp 15,000 per US dollar ahead of the regular meeting of the US central bank the Federal Reserve or the FOMC Meeting which was originally planned for Thursday afternoon local time.


"The weakening rupiah is consistent enough to move to a level of Rp 15,000, but should not be responded negatively," said Vice President of Research and Analysis of PT Valbury Asia Securities, Nico Omer Jonckheere, on Wednesday. Moreover, the weakening of the exchange rate also experienced a number of countries in Southeast Asia, such as Malaysia, Thailand, and Singapore. "If the rupiah gets stronger alone, it will be considered not competitive."


Nico’s statement was in respond to the weakening rupiah to Rp 14,459 per US dollar on Wednesday or 15.3 percent from Rp 12 545 per US dollar at the beginning of 2015. Meanwhile, the exchange rate in the 2015 State Revised Budget was pegged at Rp 12,500 per US dollar.


This weakening of the exchange rate would trigger a stock market crash. Stock price index (JCI) on Wednesday closed at 4,332.51, or 0.34 percent lower than the previous day. Nico estimated the JCI will be tested at the 4,100 position.


A number of businesses are prepared to peg the exchange rate at Rp 15 thousand per dollar. "Although heavy, we survive. But, if the exchange rate reach 16 thousand, many will collapse," said Deputy Chairman of the Chamber of Commerce (Kadin) Infrastructure division, Zulnahar Usman.


Development Director of Indonesia Stock Exchange, Nicky Hogan, said they will continue to anticipate the impact of the rupiah on the trading floor. He is confident traders have anticipated because issue of the Fed’s interest rates hike has long appeared.


Nicky also assess the swift foreign capital leaving out of Indonesia as excessive concerns. "The contribution of local investors in commercial transactions is excellent, about 50 percent."


First Asia Capital analyst, David Sutyanto, predicts the Fed will raise interest rates to 0.25 percent due to a number of economic indicators improving in the US. "Moreover, the United States will be relieved if the interest rate is rising. If delayed (increase rate), it will be more difficult to give stimulus," he told Tempo.


Finance Minister Bambang Brodjonegoro said that The Fed may not raise interest rates. Even if interest rates go up, he believes the ripple will not be big because it was anticipated by most businesses. "Most of the turmoil in fact has already been factored in our currency changes since 2013," he said.


The government, according to Bambang, believes the financial industry is stable after receiving a report from the Financial System Stability Coordination Forum ahead of the FOMC announcement. "The government also continues to keep the exchange rate under control."


Governor of Bank Indonesia Agus Martowardojo previously admitted that the drop of the exchange rate exceeding Rp 14,400 per US dollar mainly was triggered by the global economic uncertainty.


In addition, Indonesia was hit more because its exports depends on raw natural resources. "In fact, commodity prices have declined since 2012," he said last Tuesday.


ANDI RUSLI | ADITYA BUDIMAN | AMIRULLAH | PRAGA UTAMA | TRI ARTINING | ALI HIDAYAT

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