Rupiah Exchange Rate Predicted to Fluctuate

18 August 2022 10:05 WIB

TEMPO.CO, Jakarta - The rupiah exchange rate risks being pressured by the US dollar on Thursday, August 18, following the issuance of the Fed minutes, which is still monitoring inflation developments to determine monetary policy.

Fed Chair Jerome Powell at a press conference said that it could move on to smaller rate hikes going forward but remains open to the option for a larger interest rate hike at the next meeting in September, depending on economic data to be released before the meeting.

"For trading on Thursday, August 18, the rupiah is likely to fluctuate but closer to the range of Rp14,750 - Rp14,820," said Director of PT Laba Forexindo Berjangka Ibrahim Ascustombi in his report.

On Tuesday, August 16, the rupiah closed down 26.5 points, or 0.18 percent, to Rp14,768 per US dollar. Meanwhile, the US dollar index increased slightly by 0.03 percent to 106.58. 

Ibrahim explained that the movement of the rupiah that day was influenced by the sentiment of reading financial notes as Indonesia is a country with a small recession risk when compared to other countries very far away. In comparison, it reached 40-55 percent in American and European countries, and Asia Pacific countries in the range between 20 to 25 percent. 

Citing central statistics agency (BPS), as of July 2022, Indonesia's inflation rate reached 4.94 percent, and in August it is predicted to increase in the range of 5 to 6 percent. 

In September 2022, Indonesia is predicted to face hyperinflation with inflation rates in the range of 10 to 12 percent, which is caused by the rate of increase in food and energy prices which are increasingly burdening the community.

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