Analyst Predicts Rupiah to Strengthen After Eid Al-Fitr



Mahinda Arkyasa

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  • TEMPO.CO, Jakarta - The movement of Rupiah at the spot market after Eid Al-Fitr is predicted to strengthen by 60 points compared to previous trade. TRFX Garuda Berjangka Director Ibrahim, said that Rupiah will reach a level of IDR 14,650 per US Dollar with a resistance level of IDR 14,730.

    "In the closing of the previous trade, Rupiah was closing strong at IDR 14,710 or strengthening by 30 points. So there is a possibility for further positive after Eid Al-Fitr," Ibrahim said to Tempo on Saturday, May 23, 2020.

    Rupiah was driven by internal and external sentiments. Ibrahim explained that internally, the market is gaining trust as the Ministry of State-Owned Enterprises Erick Thohir issued a circular letter concerning the preparation of the 'new normal' for state-owned enterprises.

    Following the letter, a number of state-owned enterprises have made preparations to resume daily operations with a Covid-19 protocol starting May 25, 2020. Another driving factor is the statement made by President Joko "Jokowi" Widodo, who encourages the people to 'make peace' with the coronavirus.

    "This means the government sends out a signal to relax the Large-Scale Social Restriction or PSBB. The market is confident that the economy will move after that, especially in Jakarta," Ibrahim explained.

    As for the external factor, the Rupiah experienced positive effects of the plan made by the Bank of England to lower its negative interest rate. The news breathes fresh air for currency exchange rates.

    In addition, the attempts made by the United State Federal Reserve to conduct meetings with local government to discuss the economy also provides a driving factor. "We know that the number of residents requiring support in the United States is increasing," Ibrahim said.

    Meanwhile, the news concerning the second phase of the trade war between China and the United States is not considered as the main issue by the market. "Because the issue is not yet relevant," Ibrahim concluded.